Working Paper · August 2026
Molecules of Optionality — Why Europe’s Pipeline Transition Is a Capital-Allocation Problem, Not an Engineering One
“The pipe is replaceable; the corridor is not.”
European pipeline corridors are conventionally analysed as engineering assets; the paper treats them as mispriced options on four possible molecular futures.
The corridor — permitted, contracted, and physically continuous across borders — is the asset that cannot be rebuilt; the pipe within it can.
Demand risk, not technical feasibility, is the binding constraint on the transition.
The operator’s defining task is therefore instrument-stacking across borders: aligning capacity, contracts, and regulatory instruments so the corridor’s optionality is preserved rather than foreclosed.
SSRN link — forthcoming