Energy Stalemate on the Caspian

Last week was marked by a new stage of the EU activeness within realization of its energetic strategy in the Caspian region. The European Commissioner for Energy, Gunther Oettinger, visited Azerbaijan again. He met President Ilham Aliyev, the Foreign Minister Elmar Mamedyarov, and the Energy Minister Natik Aliyev. One should emphasize that Oettinger has done a lot for promotion of the South Gas Corridor Project.

“The visit by the European Commissioner Oettinger is another step to implementation of the South Gas Corridor Project in obedience to the joint declaration signed in 2011 by the president of the European Commission Barroso and President of Azerbaijan Aliyev,” the head of the European Office in Baku, Rolan Kobia, stated. According to him, since the signing of the declaration a significant progress was achieved in realization of the project. “First of all, due to the Azerbaijani-Turkish gas trade and the transit agreement, as well as the inter-governmental agreement on construction of the Trans-Anatolia gas pipeline (TANAP),” Kobia emphasized. “It shows the Azerbaijani contribution to successful realization of the corridor.”

Azerbaijan and Turkey supported by the EU and the US have dealt all disputable issues this year and have agreed on construction of TANAP. Azerbaijani gas will be transported through TANAP across Turkey to the EU. Moreover, the European route of gas transportation has been defined. It concerns the pipeline of Nabucco West.

In late June Gunther Oettinger welcomed the consortium’s decision to develop the Shah Deniz field for Nabucco West. The consortium on development of the Azerbaijani Shah Deniz field has finished estimation of potential gas export routes to Southeastern and Central Europe. Nabucco West has been chosen as a priority.

“This preliminary decision approached us to getting gas directly from Azerbaijan and other countries of the Caspian region. Notwithstanding the complete decision on the whole route from eastern Turkey to Europe, Azerbaijani gas will definitely come to Europe,” Oettinger. He called the decision a success for Europe and its energy security.

Now the EU has one unsolved and the most difficult problem, considering the regional situation. The volumes of Azerbaijani gas (16-20 billion cubic meters annually) are not enough for the growing gas appetite of the EU. These volumes are not enough for fulfillment of the relevant political aim – to diverse sources of energy supplies. Actually the point is in decrease of gas dependence from Russia.

There are three opportunities for a solution of this problem: using gas from Turkmenistan, Iran, and Iraq (to be more precise Iraqi Kurdistan). Iran, considering the sanction policy of the EU and the USA, is not considered as an acceptable variant. In Iraq the situation is very unstable, considering serious disputes about distribution of gas export revenues between regional Kurd authorities and official Baghdad.

In this context Brussels rely on Ashkhabad, considering construction of the Trans-Caspian gas pipeline to be the easiest for implementation. However, Moscow and Tehran following their economic and political interests are blocking construction of the pipeline on the bottom of the Caspian Sea. Russia and Iran are not ready to let such a major player as Turkmenistan come to European markets directly.

However, Iran is ready to be a transit country for Turkmen gas. Azerbaijan also wants to benefit from the transit, as the country has 80% of TANAP shares. But Azerbaijan might become a transit country only in case of construction of the Trans-Caspian pipeline. As a result the region is in a stalemate situation when none of the sides can achieve an acceptable solution.

Orkhan Sattartov. Exclusively to VK

http://vestnikkavkaza.net/analysis/economy/31070.html