Monday, 12 December 2011

Interviews with Trend news agency, Azerbaijan

Below are two interviews I've recently given to Azerbaijan's Trend News Agency.

South-Eastern Route has more chances to deliver Azerbaijani gas to Europe
Azerbaijan, Baku, Dec. 6 / Trend A.Badalova/
The South-Eastern Route (SEEP) has more chances to be chosen by Shah Deniz consortium to transport Azerbaijani gas to the European market, political risk analyst at Menas Associates in London, focusing on Caspian energy and political issues Alexander Jackson said.

"It would use a lot of existing infrastructure," Jackson told Trend via e-mail. "Therefore it would be cheap and easy to build."
The South-Eastern route, which was proposed by BP, envisages gas transportation through existing or expanded infrastructure of Turkey to the Balkan Peninsula, and then the distribution of ten billion cubic meters (that Azerbaijan intends to sell on the European market in the second phase of development of the Shah Deniz gas condensate field) to small buyers, including Greece, Bulgaria, Serbia, Croatia and others via the existing gas pipelines system.
At present, the consortium of Shah Deniz field development considers the proposals, which were offered by three Southern gas Corridor's pipeline projects (Nabucco, TAP and ITGI), aiming at transportation of Azerbaijani gas to the European countries.
Earlier, SOCAR senior representative told Trend that if the Azerbaijani side is not satisfied with terms of the three projects, then the South-Eastern Route of supply may be selected well.
Talking about the prospects about the Southern Gas Corridor projects, Jackson said that the smaller pipelines - TAP and ITGI are more realistic.
Nabucco project, which is designed to transport gas from the Caspian region and Middle East to the European countries, looks extremely vulnerable at the moment, Jackson said.
"It is a very expensive, time-consuming project, and there is not much appetite for it at the moment," he said.
Jackson said that one of the main challenges for the projects is to find enough money. That is why the consortium is likely to choose a cheap and flexible pipeline.
"Nabucco has the additional problem of finding enough suppliers to fill the pipeline: the other options are smaller and do not face this challenge," he said.
The plans of Azerbaijan and Turkey to build a separate Trans-Anatolian Pipeline (TANAP) were another unexpected challenge.
"This has significantly complicated the situation and may undercut pipeline plans," Jackson said.
Azerbaijan and Turkey consider the possibility to construct a new gas pipeline, which will stretch from the eastern border of Turkey to the western border of the country. The new pipeline could utilize existing sections of Turkey's main east-west transit line in addition to the newly constructed line.
Azerbaijan, Turkmenistan can build Trans Caspian Pipeline using provisional boundary
Azerbaijan, Baku, Dec. 6 / Trend A.Badalova/
Although the unresolved status of the Caspian Sea hampers the realization of Trans Caspian pipeline, Turkmenistan and Azerbaijan can build it using a provisional boundary, political risk analyst at Menas Associates in London, focusing on Caspian energy and political issues Alexander Jackson believes.
"Although the maritime border between Azerbaijan and Turkmenistan has not yet been settled, if they really want to build a Trans Caspian Pipeline they will do so using a provisional boundary," Jackson told Trend via e-mail.
The Trans-Caspian gas pipeline which runs for about 300 km is planned to be laid from Turkmen coast of the Caspian Sea to Azerbaijan's coast, where it will be connected to the Southern Gas Corridor.
Turkmenistan's talks with the European Union and other countries on the construction of the pipeline have been held since late 1990s.
Azerbaijan and Turkmenistan repeatedly stated about their interest and readiness to negotiate over the prospects of this project realization. According to Turkmenistan's President the Trans-Caspian system of pipelines is an important project indicative of Turkmenistan's readiness for mutually beneficial cooperation with all sides concerned.
Earlier the official representative of SOCAR said that Azerbaijan is prepared to offer guarantees and allocations on its territory, as well as transit opportunities and infrastructure to implement the Trans-Caspian project.
Jackson said the EU backs the Trans Caspian Pipeline, but, he believes that it does not have the political will to strongly oppose Russia.
Meanwhile, Russian opposition to this project is extremely strong, he noted.
"Some Russian analysts have suggested that Russia would use military force to stop Turkmenistan. Although this is unlikely, it does indicate that Moscow will put enormous legal and political pressure on Turkmenistan to abandon the pipeline. It will also make the project very unattractive to foreign investors, and could even ban companies which work on the pipeline from securing lucrative deals in Russia," Jackson.
In mid-September, the EU adopted a mandate to negotiate a legally binding treaty between the EU, Azerbaijan and Turkmenistan to build a Trans-Caspian Pipeline System. All 27 EU members agreed to task the European Commission with leading negotiations with the two Caspian countries.
Later, Iran and Russia expressed negative attitude toward this project. Tehran and Moscow think that the pipeline construction will damage the Caspian Sea environment.
Jackson believes that Russia (and Iran, to a lesser extent) will use the Caspian's legal status as a tool to put pressure on Azerbaijan and Turkmenistan.

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