Azerbaijan, Ukraine, and Turkey’s Consensus for the Contemporary Suez Canal

If three energy ministers gather around a table for over an hour and half, there should be some serious energy problems on the agenda. This was especially true for the first session of the Atlantic Council Energy and Economics Summit, held on November 15 and 16 in Istanbul, on a panel dedicated to Europe’s energy security.

Taner Yildiz, Yuriy Boyko, and Natiq Aliyev (Turkey, Ukraine, and Azerbaijan’s ministers in charge of energy politics) discussed Europe’s energy security in the absence of their European counterparts. Three ministers agreed publicly on their willingness to cooperate on the southern energy corridor and to support the EU in reducing its energy security vulnerability.

The southern energy corridor project derived from the EU`s fear of over dependency on Russian energy supplies after the Ukraine-Russia gas crisis. Russia’s cut of gas supplies to Ukraine was interpreted in Europe and the US as politically motivated. Even though this gas crisis lasted only a few days, it was a wake up call that exposed Europe’s current energy security vulnerability to unintended supply disruptions. The over-dependency on Russian gas supplies and gas transit roads through northern countries was considered a major setback for the future.

EU member countries focused on new measures to guarantee the security of their energy supply. The main measure is now to promote a new energy corridor, known as the southern energy corridor, which will run from the Caspian region and the Middle East to Europe via Turkey. This project aims to modify energy roads and influence power relations in Eurasia. It could become as important to the 21st Century as the Suez Canal was to the 19th.

In the southern energy corridor project, Turkey will inevitably be a main transit country – hence why understanding Turkey’s standing is very important. During the summit’s session, as a minister of the hosting country, Turkey’s energy minister, Taner Yildiz, spoke first. His speech matched the expectations for both eastern and western sides on the issue.

“We are developing projects not only to satisfy our energy supply security but also Europe’s energy supply security,” he said, confirming Turkey’s concerns for EU prospects. Meanwhile, when he declared Turkey’s new economic ambitions related to its regional foreign policy approach”, he restored confidence in Turkey’s eastern and northern neighborhoods. “Today, Turkey decided to grow not only alone but with its neighborhood and its region,” the minister said. 

Turkey, which now has the opportunity to develop its position in both oil and gas transit, is redoubling its efforts to meet demands. “To achieve this objective, both the bureaucracy and government will do their best,” said Yildiz. 

The minister also reminded his European counterparts that “Turkey will do its best to reduce the EU’s energy security vulnerability, despite the European Community not opening the energy chapter in its negotiations with Turkey for accession to the EU.” Yildiz invited the EU to reevaluate Turkey’s candidacy and condemned vetoing countries. “I believe that some countries could no longer insist on their reluctance in light of this energy project.” 

While Turkey’s full commitment in southern energy corridor project is not in doubt, its choice among gas pipeline project competing to build the corridor remains unclear. Besides its share 16.5% share in Nabucco, Turkey has also announced TANAP pipeline with Azerbaijan, and has signed agreements on the South Stream gas pipeline with Russia’s Gazprom. “Turkey has seen it can develop an energy project with one of its neighbors without disturbing the others,” Yildiz said. “We decided to invest in new projects with our Azeri friends, creating TANAP. If not all projects can be realized, we have decided to support Nabucco with TANAP.”

Turkey and Azerbaijan’s joint project, TANAP, (the Trans-Anatolian Gas Pipeline) was announced in November 2011 at the Third Black Sea Energy and Economic Forum in Istanbul. The project aims to bring gas from Azeri Shah Deniz gas fields to Turkey’s border with Bulgaria. Azerbaijan’s parliament ratified the agreement on November 20, 2012. During the conference Natiq Aliyev, the Azeri minister of industry and energy, expressed his country’s commitment to the European project.

“We expect that TANAP will be decisive in the southern energy corridor, he said. He also underlined his country’s limits, noting that “Our priority is covering the stages from production to transit.” Azerbaijan does not anymore seem to accept being reduced to a producer country. It is also seeking transit benefits for its own gas.

TANAP despite being a project proposed by Turkey and Azerbaijan, is not intended to remain limited to those countries. As Aliyev noted, project has already launched a call for foreign investors. 

Yuriy Boyko, Ukraine’s minister of fuel and energy, noted his country’s willingness to work with Turkey and Azerbaijan in the short and long term for TANAP. He also underlined the shale gas opportunities Ukraine can bring to Europe. Boyko gave an outlook of shale gas exploration activities in Ukraine, noting that two private sector participants in the session, Bruno Lescoeur, the CEO of Edison, and Riccordo Puliti, the managing director for energy and natural resources at the European Bank for Reconstruction and Development (EBRD), backed the potential of shale gas, believing it to be a game changer in Eurasian energy diplomacy.

Puliti, reminded the conference of the difference between American and European gas markets. “The unconventional gas revolution in the US has not touched Europe yet,” he said. “For now, US exports are in the Atlantic and to Japan. In Europe, the energy market is different and we still need to have cooperative prices and competition. That is why in Europe the objective is to have as many suppliers as possible.” Then Puliti backed Boyko’s opinion about Ukraine being a potential supplier of shale gas for Europe in the future. “Gas can come from everywhere,” he said

Concerning financial aspects. “EBRD has already participated in the founding of the Shah Deniz I field, the Baku-Tbilisi- Ceyhan oil pipeline, and the South Caucasus gas pipeline, Puliti said, in regard to financial aspects of the projects. “It will continue supporting southern energy corridor projects. We have already been approached by TANAP… and we are also considering giving it financial support.” 

Olgu Okumuş