Russia and Eurasia

Important Step has been Made in Supply and Transit of the Shah Deniz 2 Gas

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Ankara was also under pressure because of a delay in signing a comprehensive agreement on supply and transit of Shah Deniz 2 gas. Baku will decide the exact route of Shah Deniz 2 gas. 


BY DR. ZURAB GARAKANIDZE | DECEMBER 13, 2011

shah_deniz

– Problems with Azerbaijan could discourage Turkmenistan from shipping gas across the Caspian

– Ankara is trying to gain leverage over Baku by showing favour to Moscow

– Meanwhile, Azerbaijan is hoping that the setbacks will help it secure a better deal

Turkey’s government has been affected by the postponement of the signing of a supply and transit deal on the gas from Azerbaijan’s Shah Deniz second stage project (SD2). Ankara and Baku did sign a preliminary memorandum in early May, but the document did not cover transit issues. Finnaly Azerbaijan and Turkey have signed on October 25 a package of the gas agreements, concerning the second stage of the SD project.

  • Main breakthrough

It is considered as the basic source for projects “Southern Gas Corridor”, alternative to the Russian projects of gas supply of Europe. According to the concluded contract, Azerbaijan will deliver to Europe of 10 billion cubic m of gas annually. The agreement has been signed during visit of president Ilham Aliyev to Turkey. Ilham Aliyev’s visit was announced in the Azerbaijan press modestly – the president goes to Izmir where together with the prime minister of Turkey R. T. Erdogan will take part in solemn ceremony of a bookmark of the basement of new oil refining factory  where the Azerbaijan invested $5 bln. Actualy, Aliev’s meeting with Erdogan has confirmed deep strategic relations between the brotherly countries, packed into a wrapper from variety of grandiose actions, and has struck blow to “Gazprom” positions in Europe.

Besides a bookmark of the basement Aliyev and Erdogan in a video report have opened AYPE-T plant, which will make polyethylene of low density widely claimed in the world. Except 160 thousand tons of this material the plant will annually produce 11 sorts of petrochemicals. Later, the azerbaijani president and the turkish prime-minister have taken part in a bookmark of construction of other building – Heydar Aliyev Technical and Industrial Professional Lycée. According to Erdogan, the educational institution which becomes the symbolical educational bridge between Aegean and Caspian  Seas, urged to personify Aliyev-senior words about Turkey and Azerbaijan: “One nation, two states “. The lycée has the whole complex of inhabitant, sports and educational buildings suitable for training almost of 1000 persons. Solemn actions were accompanied by performances of Erdogan and Aliyev in which there was no lack of assurances of an eternal brotherhood, a joint pain about Karabakh and joint struggle for its returning. In this context Erdogan has congratulated Aliyev on election of Azerbaijan as a non-permanent member of the UN Security Council that is capable to facilitate the decision of the Karabakh question. In the same city in Izmir, the first session of high level Council of the Strategic Cooperation between Turkey and Azerbaijan, with participation of ministers and heads of departments of two countries has taken place. Signing of the gas agreement became the main event in Izmir.

Besides the annual deliveries of 10 bcm of azerbaijani gas in the european direction, there was agreed volumes of deliveries of gas to Turkey from the SD2 deposit after 2017 and the transit agreement for transportation of the Azerbaijan gas through Turkey also. Ilham Aliyev has underlined that next years Azerbaijan will essentially increase the gas deliveries within the limits of the contract of the SD 1.

At the first stage of the SD Turkey should receive 6,6 bcm Azerbaijani gas annually, and at the SD second stage delivery will be more than 6 bcm of gas (and more than 10 bcm later). Analyzing the agreements signed in Izmir, the expert S. Aliyev named this event as a “…historical both for these countries, for Europe and the countries of the Caspian region”. These agreements have opened a direct way for the Azerbaijani gas to Europe. Besides it, having signed the given agreements, Azerbaijan has removed last obstacles for realization of some the largest projects, such as working out of the second stage of a huge SD deposit, construction of the export gas pipelines (Nabucco, ITGI, TAP).
The agreement on gas transit will allows Baku to be defined definitively with a route of transportation of the gas to Europe. Earlier pipeline projects Nabucco, ITGI, TAP, entering into the Southern Gas Corridor, have presented offers to the partners in SD, – the route will be chosen by the middle of 2012, according to SOCAR officials. At the same time, these agreements will promote realization of the Transcaspian Gas Pipeline (TCGP).

 

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downloadbutton3Published in Political Reflection Magazine (PR) Vol. 2  No. 4

Dr. Zurab Garakanidze is an author in News Base E-magazine.

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