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    Baku Ratifies Caspian Convention

Summary

Azerbaijan is the second state to ratify an agreement on the body of water.

by: Dalga Khatinoglu

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Natural Gas and LNG News, Europe, Political, Ministries, Privatisations, News By Country, Azerbaijan

Baku Ratifies Caspian Convention

Azerbaijan's parliament became the second to ratify the Caspian Sea convention, which was signed last August after 22 years of negotiations between the five littoral states: Russia, Iran, Turkmenistan, Azerbaijan and Kazakhstan. Kazakhstan ratified it earlier in February.

The littoral states viewed the body of water differently: some saw the entirely landlocked, saltwater sea as a lake, others saw it as a sea. The two geographical features are governed by different international laws and nothing could happen while there was no agreement.

Article 14 is important for Baku, because it plans to start 10bn m3/yr gas delivery to EU through the Trans Adriatic Pipeline (TAP) by 2021 initially, as the westernmost link of the Southern Gas Corridor. The European Union (EU) has exempted TAP from the Third Energy Package, but that excludes the extension stage which would double the transit capacity in mid-2020s.

Turkmenistan is one of the possible sources for TAP, though it now seems unlikely, because of the distance it would have to travel, making it very expensive. Moreover no European importers are in serious talks about buying Turkmen gas as of now.

The original idea of a 30bn m3/yr Trans-Caspian pipe may indeed no longer be viable. Today, China is the only major importer of Turkmen gas, after Turkmenistan halted exports to Iran and Russia.

However, any Trans-Caspian pipe will still have to meet environmental standards – a condition that may enable Iran and Russia to continue to challenge the Trans-Caspian project in future. Over the past two decades, Russia and Iran have strongly opposed the Trans Caspian project, aimed to deliver Turkmen gas to EU through Azerbaijan, claiming “environmental concerns”.