Gazprom has picked Italy over Austria as the destination of its South Stream pipeline project. This decision gives the  TAG pipeline a chance to stay in business after the commissioning of South Stream.

The original design of the northwestern part of the South Stream project assumed two pipelines ending in Baumgarten (Austria-Slovakia border) and Arnoldstein (Austria-Italy border). Apparently, fulfillment of the original plan would have put the TAG (Trans Austria Gasleitung) pipeline out of business.

(Click here or on the map)

By dumping the Baumgarten extension, Gazprom gives TAG a chance to stay in business. After the commissioning of the South Stream project, TAG could operate in reversal mode delivering Russian gas from Arnoldstein to Austrian consumers, as well as to the Central European Gas Hub in Baumgarten.

Mikhail Korchemkin

East European Gas Analysis

Malvern, PA, USA

December 18, 2011