Weekly actual topics in Azerbaijan (June 29 - July 3)

Analysis Materials 7 July 2015 11:27 (UTC +04:00)

Ukraine increases relevance of Azerbaijani gas for Europe

The Southern Gas Corridor project initiated by Azerbaijan and Azerbaijani gas that will be delivered to Europe through the "corridor" is becoming increasingly relevant for the Old World. Numerous factors both in Europe and beyond pave the way for this.

The natural reasons for this growth are EU's desire to diversify the supply sources and routes of gas imports, to reduce dependence from Russia's monopolist Gazprom in this sphere, as well as the certain vulnerability of European consumers to every possible gas crises that occurs independently of them, but negatively affect the European countries.

The ongoing processes once again stress and reveal the threats that the EU faces periodically in the gas supply sphere. Therefore, Brussels increasingly aspires to feel more independent and protect itself from tensely watching the state of relations between Russia and Ukraine each autumn. (In recent years, namely Russia and Ukraine play the main role in these issues).

The two countries again failed to agree on the gas price, according to the latest reports. Ukraine has stopped gas purchase from Russia and started receiving reverse gas flows from Slovakia. Nevertheless, Kiev states that Russian gas meant for European consumers is pumped without interruption and in full volumes. However, the EU, which has already gained bitter experience from such disagreements, can do little more than think over the consequences of another disagreement on gas between its eastern neighbors.

It is another alarm for Europe, which needs a stable and safe gas supply route as much as air to breathe. Currently, only Azerbaijan offers such a route. Moreover, the Turkish Stream project that is being presented as a "stable and safe" route by Russia hasn't gained any official status, so far.

There are several reasons for this: government change in Turkey, the lack of Turkey's permission for the construction and especially the discount issue.

Russia and Turkey have the most serious disagreements on the last issue. Turkey said it could apply to the Court of Arbitration if Gazprom does not announce the final discount for BOTAS. If Russia shows the same insistence in the gas discount issue as it has in the case of Ukraine, one can absolutely forget about this project.

Given Russia's announcement about refusing to transit gas to Europe through Ukraine's territory by 2020, there are no optimistic expectations for the EU in terms of gas supply. Europe is long overdue for displaying firmness on such a sensitive issue, and should make it clear to Russia that it refuses to play by this country's rules.

The first step can be a clearer and decisive position on the Southern Gas Corridor, since this project set a precedent. After a long time, it is the first large pipeline via which Europe will receive non-Russian gas.
The successful implementation of the Azerbaijani project will certainly give Europe the necessary impetus that will push it towards further activities on ensuring its own energy security. We can only hope that the Europeans will realize this before 2020, when the first Azerbaijani gas will be delivered to their territory.