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Azerbaijani-Turkish Gas Deal Opens Southern Corridor

Azerbaijani President Ilham Aliyev (left) and Turkish Prime Minister Recep Tayyip Erdogan sign a protocol of the first meeting of Azerbaijan-Turkey High-Level Strategic Cooperation Council in Izmir on October 25.
Azerbaijani President Ilham Aliyev (left) and Turkish Prime Minister Recep Tayyip Erdogan sign a protocol of the first meeting of Azerbaijan-Turkey High-Level Strategic Cooperation Council in Izmir on October 25.
By Bruce Pannier
Turkey and Azerbaijan have signed a long-awaited agreement on Caspian natural-gas supplies and transit to Europe, providing a boost to the EU's efforts to diversify energy supplies and setting up a bidding war for three key pipeline projects.

The agreement, signed in the Turkish city of Izmir on October 25, opens the door to shipments of Azerbaijani, and possibly Turkmen, gas to European customers.

Under the deal, Turkey is to buy gas from Azerbaijan's Shah Deniz-2 field and transport the gas through its territory to Europe. The lack of an agreement on transiting supplies across Turkey has long been the major obstacle to the EU's Southern Corridor energy project, which aims to develop routes that bypass Russian or Iranian territory .

Now all that remains is for Azerbaijan to select from three proposed pipelines -- the Interconnector Turkey-Greece-Italy (ITGI) pipeline; the Trans Adriatic Pipeline (TAP); and the EU's flagship project, the Nabucco pipeline. Earlier this month, Azerbaijani President Ilham Aliyev said that the bid "most acceptable for both Azerbaijan and our partners" would be the winner.

Representatives of the three projects made their cases at a separate meeting on October 25 in Istanbul.

Lobbying Hard

"It's clear that Nabucco aims to transport gas from the Shah Deniz[-2] gas field and from other Azeri sources and that's why we have to align our efforts, of course, with the gas fields on the Azeri side. And we're working on that," Christian Dolezal, head of public affairs at Nabucco, told RFE/RL.

Nabucco has been lobbying hard for Caspian gas contracts and shareholders have been working individually to convince Azerbaijan and Turkmenistan to agree to supply the project. The reason for the EU's strong support for Nabucco may be simply that the project offers to carry more gas to the heart of Europe than the ITGI or TAP. Nabucco also promises to bring the gas to the heart of Europe -- Baumgarten, Austria.

Construction of the Nabucco pipeline
Construction of the Nabucco pipeline
But Shah Deniz-2 will not provide enough gas to fill Nabucco when and if that pipeline starts full operation
 
"Shah Deniz has a certain volume, that's true. But we also see there are additional volumes, first of all, available in Azerbaijan," Dolezal says. "And, in turn, this would be enough for a first step for Nabucco. We also see then, of course, the potential that Turkmenistan has, and there are talks ongoing for a trans-Caspian pipeline."

Turkmenistan is believed to have the world's third-largest gas reserves but has been reluctant to sign any contracts for gas deliveries to Europe. This is because, despite all of the European pipeline plans, the fact remains that no sections of pipe have been laid. Furthermore, signing a deal with the EU could anger Russia, still the largest purchaser of Turkmen gas, albeit in greatly reduced volumes compared to just a few years ago.

Public Statement

Turkmenistan's position appears to be changing, however, according to Robert Cutler, senior research fellow at the Institute of European, Russian, and Eurasian Studies at Carlton University in Ottawa, Canada.

Cutler notes an interesting comment made by Turkmen President Gurbanguly Berdymukhammedov during a visit by Austrian President Heinz Fischer earlier this month.

"Berdymukhammedov said what he had not said in public before, which was that Turkmenistan would supply gas to Europe," Cutler says. "He had never actually been quoted in the Turkmenistan press saying exactly those words. Also, in the last week it was reported that he approved the composition of a state committee that will elaborate the terms and the logistics and implementation for the provision of gas to foreign customers."

Turkmen President Gurbanguly Berdymukhammedov
Turkmen President Gurbanguly Berdymukhammedov
That would require a trans-Caspian pipeline to link Turkmenistan with the pipeline networks in Azerbaijan. Cutler notes that plans for such a pipeline along the Caspian seabed received a welcome boost last month from the EU.

"What has changed, of course, is the European Commission requesting and receiving authority and being empowered to participate actively in the elaboration and implementation of an agreement between Azerbaijan and Turkmenistan for the construction of a trans-Caspian gas pipeline," Cutler says.

Russia is threatening to fight construction of a trans-Caspian pipeline, citing potential environmental damage and the unclear legal status of the Caspian Sea, a matter the Caspian littoral states have been debating for a decade now.

The October 25 Turkish-Azerbaijani agreement clears the way for Caspian gas to reach Europe, but the real work has yet to begin.
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Comment Sorting
Comments
     
by: Camel Anaturk from: Kurdistan
October 27, 2011 11:22
Talking turkey:The moslem sisters open a corridor-now all they have to do is to find enough gas to fill the pipe-lines,but that is not so important-we just have to spend a billion or two on something that will never work out-a pipe-line without enough gas running thru kurdish and armenian territory-well we can always import turkish empty talk &azeri blabber,and now excuse us ,cause we`re busy doing nothing.Allah akbar.

by: RD
October 31, 2011 02:51
There is honor amongst thieves, but not between these two corrupt goons.

by: Ledvov from: Shaki, Azerbaijan
October 31, 2011 10:03
The strength and confidence of Azerbaijan started with BTC pipeline, followed by the Baku–Novorossiysk and Baku–Supsa pipelines. The second, yet to begin, stage is the South Caucasus Pipeline, which is to transport natural gas from the Shah Deniz field in Azerbaijan to Turkaih ports. The third stage would be the Trans-Caspian Gas Pipeline, which would transport natural gas from Turkmenistan through the Caspian Sea to Baku in Azerbaijan and from there to Turkish ports again. This pipeline would run throguh This project could followed up by the Trans-Caspian Oil Transport System, this aould be similar to the previous pipeline except it would transport fossil fuels from Kazakhstan to Baku. The Nabucco project would simply be an expansion of all these projects and the center of it all is the Sangachal Terminal in Azerbaijan. Other confirmed future projects is the Caspian Railway system, which will revive the ancient Silk Way and transport Chinese goods from Turmenistan to Azerbaijan. Non-energy transit goods in Azerbaijan will increase from 350 tons in 1995 to 85 million tons in 2020. This will be the future economy of Azerbaijan and it will have a dramatic impact on the region.

by: Kaunas from: Moscow
November 01, 2011 20:10
Thanks very much for the interesting article.

Can you please clarify where the second photograph is from? The caption states that it depicts "construction of the Nabucco pipeline". I was unaware that construction had begun.

Much appreciated.

by: Sara Tahiran from: Baki Basqal
November 21, 2011 11:40
Analysis of the situation created after the signing of Azerbaijan and the EU agreement on the Nabucco project, as well as signing the gas agreement with Turkey on the South Stream is a major issue of the Western analysis of newspapers and magazines that discuss different points of view on an alternative source of gas to Europe.
The concept of an alternative pipeline has acquired a special significance after the energy crisis that arose in connection with the fact that Russia stopped gas transit through Ukrainian territory, etc. However, this political crisis between the two countries in Europe and in the world was considered as Russia's pressure on the EU than it can use at any time in order to achieve its foreign policy goals.
Construction of the Nabucco gas eliminates the EU's dependence on Russia in the event of a crisis of relations and at the same time may attract him Turkmenistan and Iran, which will release Europe from total dependence on Russia.
It is no coincidence the European Commission - the executive body of the European Union - supported the Nabucco project, as for this project, the future of European energy security.
The newspaper stressed that "Azerbaijan's President Ilham Aliyev confirmed that natural gas from his country to be shipped to Europe, but did not say how." Of course, do not say. After all, the President understands that there is a thousand obstacles to the implementation of this project.
One of the obstacles - Armenia, aggressive country which occupied 20% of Azerbaijani lands and at the same time threatening the Georgia's separatist Dzhvaheti.
Azerbaijan demands the liberation of occupied lands, especially the international community to recognize Azerbaijan's territorial integrity.
Russia as a country, disinterested in the alternative pipeline, putting pressure on Azerbaijan through Armenia and threatening renewed war in Karabakh.
The war in Karabakh endangers all oil – gas project , but also the work of existing pipelines.
Therefore, the statement "The Wall Street Journal" that "the fate of the Nabucco pipeline depends on Azerbaijan" considers the matter one-sidedly, does not emphasize the idea that in this matter must have the will, all EU countries and the U.S., which will help to restore Azerbaijan territorial integrity and to establish peace in the Caucasus region.
On the other hand, the EU laid in Azerbaijan negotiating with Turkmenistan to build a pipeline across the Caspian Sea, gave the green light to export Turkmen gas to the West, who knows about countering Russia and Iran, ie. By this step the EU has shown that Nabucco is a geopolitical order and its not going to retreat.
The EU is actively involved in the process of the South Caucasus, and, naturally, the first task is to eliminate the threat of war over the region.
West knows that Armenia - a vassal of Russia, and the leaders of its mannequins. The military agreement signed between Armenia and Russia - evidence of this.
Armenia after the signing of the treaty has become an outpost of the EU and Russia, of course, was to perform only its political and military orders.
The fact that only Russia can soothe your Forpostan known around the world. Without Russian help she would suffocate in a few months, because it has no any kind of economic opportunities for its residents work and food. As in Soviet times, Armenia is held by Russia's donations, i.e. at the expense of Russian.
Presidents of the United States and France gave to President Dmitry Medvedev carte blanche, he decided to Karabakh problem peacefully, that is, by freeing occupied by Armenians, or rather Russian, Azerbaijani lands.
Peace in the Caucasus heralds the region's rapid economic development, restoration of the old integration of economic and cultural relations, the transformation of the South Caucasus in the European country.
And all this depends not only on Azerbaijan and the entire world community.

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