Russia enters “gas race” with Azerbaijan

Russia enters “gas race” with Azerbaijan

Baku, Azerbaijan March 2

By Maksim Tsurkov - Trend:

Baku hosted the second meeting of the Southern Gas Corridor Advisory Council Feb.29. The event itself, participation of a large number of high-ranking guests in it, shows that the project is rapidly nearing completion.

Curiously enough, on the same day, Russian President Vladimir Putin held a meeting with head of Gazprom company, Alexey Miller in Moscow on supplying gas to Europe via the same route as the Southern Gas Corridor, that's to say, to Greece and Italy.

It seems that Russia is seriously concerned about the progress of the Southern Gas Corridor and the competition with Azerbaijan in gas supply to Europe.

This assumption has grounds, given that two Russian projects on gas supply to Southern Europe (South Stream and Turkish Stream) have already failed for various reasons.

At the same time, Moscow sees that there are no problems regarding the implementation of the Southern Gas Corridor project, as demonstrated by the second Ministerial Meeting of the Southern Gas Corridor Advisory Council in Baku.

At the meeting in Baku, EU Commission Vice-President for Energy Union Maros Sefcovic reiterated the key and strategic importance of the Azerbaijan project. It was very significant because Moscow at the time refused from the South Stream project's implementation namely due to the 'unconstructive position' of the EU. But now, the Russian Federation sees the support for the Southern Gas Corridor by Europe and the US, and zealously boosts other similar projects.

All this suggests that Russian experts and even the country's leadership see the Southern Gas Corridor as a competitor and a threat to their interests in Europe, which once again proves its success and feasibility.

It was also noted by Alexey Miller, who admitted that Gazprom with his new idea to supply gas to southern Europe repels the ITGI [Interconnection Turkey Greece Italy] Poseidon project, which once envisaged the transportation of 12 billion cubic meters of Azerbaijani gas from Greece on the seabed of the Ionian Sea to the south of Italy. Russia's attempts to use Azerbaijan's idea are another proof and recognition of the foresight of Baku's energy policy.

Why there is such a struggle especially for the European gas market?

First, this market is still very attractive and besides that, its gas is a leverage of influence in Europe for Russia, which the country does not want to lose. Second, the issue on supply to another promising market - China - is not clear yet. The parties continue to negotiate, in addition, an expensive pipeline needs to be built, so it is a stretch for now.

Regarding the financing of the Southern Gas Corridor project, Azerbaijani Energy Minister Natig Aliyev said that all financial issues in this regard will be addressed until May. The European financial institutions also confirmed that.

Sefcovic also said in Baku that it is very important to implement the Southern Gas Corridor in time to avoid unnecessary costs. High Representative of the EU, Vice-President of the European Commission Federica Mogherini said that the project is vital for Europe. This means that the support will be rendered and Europe itself is greatly interested in it.

In his speech, Azerbaijani President Ilham Aliyev also stressed that the Southern Gas Corridor is a large-scale infrastructure and energy project of Europe itself. Moreover, the president said that there may be other sources of supply. This expands the geographic coverage and the involvement in the project. This will attract additional investments into the country and assist in getting a profit.

Of course, all this can not but bother Russia, which seems to take a great interest in a 'gas rally' with Azerbaijan.

Trend analyst Maksim Tsurkov

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