Azerbaijan will not sell all its gas via one export route

Azerbaijan will not sell all its gas via one export route

Azerbaijan, Baku, Feb. 10 / Trend V.Zhavoronkova /

Azerbaijan seeks to diversify its gas exports and Azerbaijan's strategic interests include selling some amount of its gas to Turkey and Europe, Expert at the German Council on Foreign Relations (DGAP) Marcel Vietor said.

"Diversifying energy resources is safer and wiser than selling the entire volume to a single buyer and Azerbaijan is aware of this," Vietor said. "I assume that the diversification of some part of Azerbaijani gas through its sale to Europe and Turkey is in the interests of the country."

Gas produced as part of a full-scale development of the large Azerbaijani gas field Shah-Deniz is regarded as a source for projects such as Nabucco , ITGI (Turkey-Greece-Italy) and TAP (Trans-Adriatic pipeline).

Partners to develop the Shah Deniz field intend to sign contracts for the sale of gas from the second stage of the project in mid-2011.

However, despite that it is profitable for Azerbaijan to diversify its energy supplies to Europe, Azerbaijan is unlikely to agree to export all the gas to the EU in order subsequently not to become dependent on this direction.

"Azerbaijan does not have enough gas that is necessary to fill the Nabucco pipeline fully. Even it had, Baku likely won't send all of its gas to one direction by the Nabucco pipeline," Vietor said.

There is an existing infrastructure, the Baku-Tbilisi- Erzurum pipeline (BTE) for Azerbaijani gas transportation to Nabucco. However, the BTE's existing capacity is not enough to transport all necessary gas to Nabucco, not mentioning the other Southern Corridor projects. It is however an advantage that BTE pipeline already exists, Vietor believes.

The Baku-Tbilisi-Erzurum pipeline (South Caucasus Pipeline) is designed to transport Azerbaijani gas to Georgia and Turkey.

"Azerbaijan could think about building another pipeline just next to it, where there would be a big extends of capacity," he said.

Vietor said the country has to simply upgrade this transportation route that is at least easier than building a new one. But nevertheless one has to invest in such pipelines.

Vietor said Azerbaijan has an important role for Nabucco, because Europe expects that it would be the first country, which will give its gas to this project.

Azerbaijan is also important as a transit country for the Turkmen gas, he said. It is expected to fill Nabucco with the Turkmen and Iraqi gas in addition to Azerbaijani.

The question is how Turkmen gas can be transferred to Turkey, and onward to the European Union, Vietor added.

There are four possibilities for transportation by pipelines: the first way is via the Caspian Sea, but it is difficult because of the legal issue of the unresolved Caspian Sea status. Meanwhile, Turkmen President Gurbangulu Berdimuhammedov stated earlier that the construction of underwater pipelines in the Caspian Sea should be settled only between the participating countries of this process, through following the highest environmental standards.

Also there will be alternatives to build pipelines onshore through Iran or Russia, which is again contested.

"Due to the controversies about Iran's nuclear program many actors don't want to participate in such a project," he said.

"The other way can be Russia that would also be a difficult option, because if Turkmenistan and Azerbaijan decide to transport gas to Turkey and Europe, they would likely do it excluding Russia. The aim of diversification is to reduce Russia's influence at the expense of gas sales by other manufacturers," he said.

Vietor said the fourth option might be delivering gas by ships, but might not be economically available.

"All this four options have problems. The most desirable option is the fist - to build pipeline on the ground of the Caspian Sea. If this project will not realized, there is a possibility that the gas would not be transported at all from Turkmenistan Westwards," Vietor said.

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