If Turkmenistan’s government decides to build a Trans-Caspian pipeline, Azerbaijan will support the idea, but it will not be the initiator. This statement came from Azerbaijani President Ilham Aliyev in an interview with the Italian newspaper Il Sole 24 Ore.
Although the Trans-Caspian gas pipeline project has been discussed over 15 years, Aliyev emphasized that nothing concrete has been done.
In this regard, the Azerbaijani leader recalled the experience of Baku, which was an active initiator of the Southern Gas Corridor. “We assumed a leadership position, engaged in discussions with other nations, customers, and businesses. We were also the primary investor. This was also the case during the construction of the pipeline from Baku to Ceyhan”, he told.
According to Aliyev, resource owners rather than transit nations are the ones that start projects like the Trans-Caspian gas pipeline. Transit countries can only support, provide territory or receive general joint stock or transit contributions.
“The Trans-Caspian project is based on the resources of Turkmenistan. Therefore, it will be up to the Turkmen government to decide whether to construct the Trans-Caspian pipeline. We will certainly support them if they decide to go in that direction. However, we won’t take the initiative in this case”, Azerbaijan’s president stressed.
Baku’s European gas plans and obstacles
Returning to the history of the issue of the Trans-Caspian gas pipeline, it is worth noting that the President of Azerbaijan has only reaffirmed the position that Baku has held regarding the Caspian pipeline for many years.
Recent statements by Azerbaijani officials indicate that Azerbaijan is not an interested partner in promoting the idea of the Trans-Caspian gas pipeline.
In March of this year, the country’s energy minister Parviz Shahbazov claimed that Azerbaijan has confirmed gas reserves worth 2.6 trillion cubic meters. “We can supply natural gas to ourselves, our partners and Europe for 100 years,” he said.
Moreover, he announced that Baku is going to enhance its gas supplies to Europe. For this, the Southern Gas Corridor has an “untapped potential” through which Azerbaijan may pump significant volumes of fuel to Europe together with Turkey.
Another development proves Azerbaijan’s bigger plans on expanding in the EU energy market. In July of this year, Aliyev and Ursula von der Leyen, President of the European Commission, inked a MoU on doubling the volume of gas transported from Azerbaijan to Europe and investing.
By 2027, Baku will increase its gas exports to the European Union from 10 billion to 20 billion cubic meters, the memorandum states.
Nevertheless, in order to implement these plans, it is necessary to upgrade the Southern Gas Corridor’s linkages, namely the Trans-Adriatic gas pipeline TAP and the Trans-Anatolian (TANAP).
“Doubling exports to Europe is a big deal. It is not easy. It is necessary to invest and expand technical capabilities, since at present the capacity of our TAP pipeline transporting gas to Europe is 10 billion cubic meters. That is, we have to bring it up to 20 billion cubic meters, which requires financial resources and shareholder agreements, this is a whole process,” Aliyev stated in an interview.
Taking into account the activism in approaches, Azerbaijan will intensively promote the idea of increasing its gas supplies to Europe in the near future.
Simple in concept, challenging in practice
Political will alone won’t be sufficient to raise the share of Caspian gas in the European energy mix by tangible amounts, even at the expense of Turkmen gas.
Why has the EU failed to diversify its gas import harnessing the vast Caspian resources is a question that European experts have already raised. The Eurasianet.org wrote recently: “In theory, as one EU technocrat patiently explained to me, creating a commercially viable pipeline project to carry Caspian gas to Europe is simple: You need Europeans to sign contracts to buy the gas, which they are willing to do. This guarantees a revenue stream and enables banks to provide the tens of billions of dollars in financing needed to develop the fields and the pipelines to deliver the gas.”
However, despite its growing need for new sources of valuable natural gas, the European Union has only expressed general support for the Trans-Caspian project and has not yet taken any significant action regarding the Trans-Caspian project. By the way, the Turkmen leadership spoke quite clearly about such actions a few years ago. This is a joint decision by the project participants on a range of organizational, legal, commercial, technical and other issues, following which Ashgabat could be ready to talk in more detail about the export of Turkmen energy resources in the European direction.
Only realistic and firmer decisions and proposals from Western stakeholders can provide the Trans-Caspian gas pipeline project a decisive boost. ///nCa, 4 September 2022