Baku stance: Turkmenistan’s gas in exchange for Karabakh

Baku stance: Turkmenistan’s gas in exchange for Karabakh

Alexander Krylov: mass media still present TANAP as attempt to bypass Russia’s territory, rather than an economically beneficial project.

On September 28-29, Istanbul hosted the international “Trans-Anatolian Gas Pipeline: Challenges and Prospects for the Black Sea countries and the Balkans” conference, which brought together parliament members, diplomats, businessmen and experts from many countries, including the U.S., EU, Russia, Ukraine, Turkey, Armenia, Azerbaijan, and Georgia. The conference aimed to discuss the new project of Trans-Anatolian Gas Pipeline (TANAP).

PanARMENIAN.Net - Azerbaijan and Turkey signed an agreement on TANAP implementation in June 2012. The pipeline will run about 2000 km from east to west in Turkey; it is further expected to join the pipelines leading to Central Europe or Italy.The planned capacity of TANAP will be 16 billion cubic metres of natural gas per year at initial stage, with further increase up to 25 billion cubic metres. Of this, 6 billion cubic metres will be supplied to Turkey, while the remaining part will go to the European market. The launch of the pipeline is scheduled for 2017. According to preliminary estimates, the gas pipeline will cost from 7 to over 10 billion euros.

The conference was hosted by Azerbaijan Foundation for Business Development and Entrepreneurship, headed by Sabit Bagirov, with support of SOCAR and a number of other organizations. The gathering discussed three potential options for implementing the TANAP project in practice.

The first variant was set forth in the agreement signed between Azerbaijan and Turkey in 2012. The second option implies construction of submarine Trans-Caspian Gas Pipeline and increase of TANAP capacity up to 60 billion cubic metres due to Turkeminstan’s gas.

Supporters of the third variant advocate the participation of Turkmenistan and Kazakhstan, as well as Iraq, Iran and Syria in TANAP project. They believe this option will become feasible soon, after the “Arab revolution” triumphs in Syria and Iran and the situation in the region normalizes. In this case, the intention to implement the Nabucco project is actually voiced; according to one of the conference participants, “it has been shelved now, but the concept of supplying gas to Europe is still urgent.”

Those favouring the third option view the TANAP and Baku-Erzrum gas pipelines as fragments of a global energy project rather than independent units. This project aims to tackle a complex of economic and political issues: deprive Russia of the opportunity to employ the energy factor for political purposes, eliminate EU dependence on Gazprom's monopoly, strengthen the unity of Turkic states, curb the influence of Russia and China and promote the stance of Turkey, EU and the U.S. in Central Asia and Southern Caucasus, etc.

The conference discussions demonstrate that supporters of the first variant (mostly Azerbaijan-based) believe that uniting the TANAP and Trans-Caspian Gas Pipeline is wrong in principle, since these are absolutely different projects. They are concerned over the fact that even after signing the agreement on TANAP and receiving Azerbaijan's pledges to fill the new gas pipeline, Turkey further seeks new sources of gas in Turkmenistan, Iraq and Iran. This may result in potential politicization of TANAP and hamper the implementation of the project.

Though the Cold War is long over, the mass media still present TANAP as another attempt to bypass Russia’s territory, rather than an economically beneficial project. However, in view of the second and third options of TANAP development discussed at the conference, such media assessments are quite justified as well.

After 2025, Azerbaijan plans to get 15 billion cubic metres of gas for domestic usage and 35-40 billion cubic metres for export, of which 32 billion cubic metres will go to EU. Supporters of the first variant do not rely on Turkmenistan's gas to be pumped into TANAP: negotiations on gas supply to Europe through Azerbaijan continue for quite a while now, with Turkmenistan pledging to supply 30 billion cubic metres of gas to Europe; despite this, the talks never went beyond mere talking, for many reasons.

Adherents of the first variant stress that TANAP should be put into practice as soon as possible; otherwise, the Russian gas will further go to Europe, contrary to Azerbaijani one. Also, they say Azerbaijan may become a transit country to supply gas from Central Asia. This is however a matter of future, and it should not hamper the prompt implementation of TANAP.

The prospect of implementing TANAP in its initial version specified in the agreements between Azerbaijan and Turkey seems quite feasible. The project got initial governmental support by project initiators Azerbaijan and Turkey, and Azerbaijan has an opportunity to fund its implementation independently. Later the major European companies voiced their interest in the project. Apparently, this project does not face the threat of being shelved like Nabucco due to lack of funding or endless disputes between too many participants and interested parties.

The potential danger looming over TANAP is the economic and political crisis in European countries which may lead to drop of gas demand. However, if Europe overcomes the crisis (which is still more likely than forecasts of apocalyptical scenarios), its needs for all kinds of energy will definitely grow, resulting in increased energy consumption and even greater demand for the TANAP project.

Challenges of the European nuclear energy sphere also favour the TANAP; following the accident at Fukushima station in Japan, it has appeared in quite hard situation. The increasing instability in Northern Africa, in Near and Middle East which cuts the number of reliable energy carrier suppliers to European market also adds to this. Finally, the U.S. policy and EU’s urge to cut its energy dependence on Russia also favour the TANAP project.

Can TANAP entail negative consequences for Russia on European market? Currently Russia supplies 25% of raw hydrocarbons consumed by Europe, satisfying 42% of European gas demand. Supply of oil and gas to European market is crucial for Russia just because this market has so far remained the most reliable and large one.

Active promotion of Russian energy carriers to Asian markets does not at all imply Russia’s intention to abandon its role of key energy resource supplier to European market. On the contrary, the Russian leadership and energy companies are quite persistent in promoting new energy projects in Europe.

Forecasts say that annual consumption of gas in EU countries will hit at least 500-550 billion cubic metres and 610-640 billion cubic metres at most by 2015, with almost half of this amount to be provided by Russian import. Obviously, maximum volumes of gas supply to Europe envisaged by the initial variant of TANAP pose no serious threat to Russian suppliers with regard to such huge market.

Unlike Nabucco, the TANAP project, in its initial version, did not touch the sensitive issue of Caspian status. That is the reason it met no opposition on the part of Russia and Iran. However, the attempt to transform TANAP into Nabucco will produce quite predictable reaction by Russia, Iran, and China which increasingly strengthens its positions in Central Asia and has its own plans with regard to local oil and gas resources.

The recent conference discussion on the security of the new pipelines demonstrated that the experts are perfectly aware of the potential negative consequences for the Caspian and Black Sea region in case the second and third proposals on TANAP are passed. Some of them perceive the potential risks as quite acceptable ones given the expected global benefits. Still, will the Azerbaijani government, which is to undertake the main burden of project funding and major potential risks, share this viewpoint?

Statements voiced by Azerbaijani experts show that this variant is possible only in case the U.S. and EU provide serious guarantees for Azerbaijan’s security against all potential threats. Another condition is build-up of the military potential and neutralization of “terrorism threat by Armenia” through restoration of Azerbaijan’s territorial integrity. Thus the old yet unfulfilled Azerbaijani “oil in exchange for Karabakh” formula may transform into “Turkmenistan’s gas in exchange for Karabakh” one.

The diplomatic stir around the TANAP project hints that the near future will show whether the U.S. and European Nabucco supporters will gain Baku’s consent to use TANAP for reanimation of their global endeavour.

Alexander Krylov, Institute of World Economy and International Relations of the Russian Academy of Sciences
 Most popular in the section
Crimea gave the world many outstanding Armenians, including world-renowned painter Hovhannes Ayvazovsky.
He turned to me with a serious expression and asked me if I felt concerned for my safety or had received personal threats from Azerbaijan.
Dozens of Armenian were killed, majority of whom were set afire alive after being beaten and tortured.
“We have a Sunday school and folk culture groups. We do our best for our children to know the native tongue and traditions,” Davidyants says.
 At focus
Zareh Sinanyan selected to be next Glendale mayor

Zareh Sinanyan selected to be next Glendale mayor Glendale Council Members are elected by the public at large while the Mayor is selected by the Council Members on an annual basis.

 More articles in this section
106th birth anniversary of famed expressionist Arshile Gorky April 15 marks the birthday of a preeminent American abstract expressionist of Armenian decent Arshile Gorky.
Artsakh: peacebuilding is about people not politicians Mass movements of people, the drawing of complicated borders, and unsatisfactory political structures have blighted the past.
10th anniversary of Armenian officer Gurgen Margaryan's axe-murder Lieutenant of the Armenian Armed Forces Gurgen Margaryan, 26, was hacked to death, while asleep, by a fellow Azerbaijani participant.