Shifting Alliances and Energy Blackmailing in Central Asia: Azerbaijan Warns Turkey and Europe on Gas Supplies
Europe's increasing dependence on Russian gas gave strategic importance to countries that are critical for EU’s efforts to diversify energy imports away from Russia, including Turkey as a transit country and Azerbaijan, as a possible supplier. Nonetheless, geostrategic issues, including a small breakaway region in Azerbaijan, Azeri-Turkish ties and Turkey’s EU membership bid complicate the picture and create a conundrum of political and energy standoffs in the region that could undermine the EU's energy security efforts.
Event to Watch:
The president of Azerbaijan, Ilham Aliyev, in October warned that Turkey pays too little for natural gas and Baku will explore other routes to supply its gas to Europe. The move comes days after the Azeri state-run gas firm signed an agreement to sell 500 million cubic meters of gas annually (cm/y) to Russia's Gazprom starting in 2010. The worsening of the Turkish-Azeri ties could could push Azerbaijan closer to Moscow and severely undermine EU-backed Nabucco pipeline project to bring non-Russian gas to Europe via Turkey. (RFE)
Tit for Tat Dynamic in the Region:
1. Azerbaijan-Turkey
Azerbaijan and Turkey remain locked in a stalemate over gas prices and transit terms. According to the Global Inisght, the dispute "effectively boils down to Azerbaijan's attempts to sell its gas to Europe via Turkey versus Turkey's attempts to buy and re-sell this gas".
Tensions have been intensified after Ankara agreed to restore ties with Armenia. Turkey closed its border with Armenia in 1993 in support of Azerbaijan, which was fighting Armenian-backed separatists in Nagorno-Karabakh.
Azerbaijan has signaled that any betrayal by its ally could affect future sales of its gas through Turkey to Europe. (FT)
Meanwhile, Russian energy company Gazprom is keen to secure long-term gas contracts with Azerbaijan and thwart EU plans to tap Azeri gas fields. (EIU)
2. Russia-Azerbaijan
The signing of a 500 million cm/y gas supply deal between the Azerbaijan's energy company and Gazprom took place in October, "signalling that Azerbaijan's patience with Turkey is growing thin".(Global Insight)
Russia's monopoly on Caspian energy export routes was broken in 2006 when two new pipelines - Baku-Tbilisi-Ceyhan (BTC) and Baku-Tbilisi-Erzurum (BTE) - were extended from Azerbaijan to bring non-Russian oil and gas through Turkey to Europe. (RFE)
Following the conflict with Georgia, Azerbaijan has shown signs of distancing from the West to avoid antagonizing a newly belligerent Russia that have been using ‘frozen conflicts’ (separatists regions in the CIS) to exert military or political pressures and maintain leverage over its former satellites. (RGE)
3. Turkey-EU
Push for Nabucco pipeline project, aimed to import Caspian gas to Europe via Turkey, circumventing Russia, increases Turkey's strategic importance to the EU.
At an energy summit in Prague, Turkey signaled it might withhold support from the EU-backed Nabucco pipeline project unless its EU membership talks are unblocked. (EU Observer)
Gas disagreements between Turkey and Azerbaijan remain a major hurdle to progress on the Nabucco pipeline. (GI)
RGE.com
