The Great Caspian Gas Pipeline Game

In this paper we consider the problem of competition between gas pipeline projects. This problem becomes especially important in the context of evaluation of the future of energy infrastructure, transportation routes, investments, timing of the projects, supply and consumption, price formation, etc. We illustrate significance of these aspects in the case study of the planned Caspian gas pipeline routes to the turkey energy market. We propose a dynamical game model for the description of investment scenarios, optimization of commercialization times of gas pipelines, regulation of gas supply and formation of gas price. This model constructed on the basis of classical and micro and macro patterns of mathematical economics provides a macroeconomic tool for the analysis of future gas infrastructures. It comprises four microeconomic levels of optimization: assessment of the market of potential innovations, selection of innovation scenarios, regulation of the future supply and optimization of the current investments. The first simulations of the model give promising results for assessment of energy markets