Cooperation in energy and security: partnership based on mutual interests

Cooperation in energy and security: partnership based on mutual interests

Dr. Vugar Bayramov, Chairman of CESD, Azerbaijan had speech at the Azerbaijani Parliament on Energy Cooperation between Azerbaijan and USA which titled as “Cooperation in energy and security: partnership based on mutual interests” on February 14, 2015.

The whole speech of Dr. Bayramov was as following; (Download Full Speech Here)

“Dear Ladies and Gentlemen and Dear Members of Parliament

This week the first meeting of the Ministerial Meeting of the Southern Gas Corridor Advisory Council was taken place in Baku. By hosting this meeting, Azerbaijan demonstrated that the country is keen to support construction of new pipelines to export Azeri gas to the European market. USA is the strategic partner of Azerbaijan. In fact, both oil and gas strategies of Azerbaijan are pro-western oriented.

Despite the political ups and downs, energy cooperation between Azerbaijan and Western countries continues its dynamic development. On September 20, 2014 Azerbaijan founded the Southern Gas Corridor. It will be a project using the Trans-Anatolia Pipeline (TANAP) to deliver gas to the European border through Georgia and Turkey. It will then be transported through Greece and Albania to Italy using the Trans-Adriatic Pipeline.

Mr. Ilham Aliyev, the President of Azerbaijan, highlighted this week that Azerbaijan will be only new source for EU in upcoming years. From this perspective, source diversification is also very important to EU in order to increase number of import routes as well as decrease gas dependency.

Energy cooperation between Azerbaijan and USA and its allies has been development in following 3 directions;
Direct energy cooperation between Azerbaijan and USA;

Energy cooperation between Azerbaijan and EU;

Providing anti-terror coalition particularly Afghanistan with energy resources.
USA is one of oil importers from Azerbaijan. Crude oil export to the US has consisted about 14.0 % of total Azerbaijani oil export between 2008-2014.

Regarding to the Azeri crude oil export to the European market, more than 60.0 % Azerbaijani oil has been exported to EU between 2008-2014 meanwhile, Israel’s share was about 10.0 % of total export.

Total annual value of Azerbaijan’s oil products export to Afghanistan is more than $ 110.0 million US.

The natural gas has been become more strategic instrument in the last couple decades and it will remaining as one of the main global instruments in the future. Demand for natural gas will rise from the current level of 500 billion bcm (in 2010) to 620 billion bcm in 2030 In Europe. European production is decreasing rapidly. In order to reduce gas dependence in the EU market, real supplier of TAP is Azerbaijan and potential suppliers are Turkmenistan and Iraq; Iraq’s gas reserves is 4.2 trillion cm and production is 15.0 billion cm. Azerbaijan’s gas reserves is 2,5 trillion cm, production is 29 billion cm. Turkmenistan is gas reserves 9,0 trillion cm and production is 45 billion cm. Since participation of İraq and Turkmenistan in the first stage of TAP does not seem realistic, Azerbaijan has to provide the pipeline with min. 20 billion cm natural gas.

TAP’s strategic objectives which are to open a new gas supply corridor for Europe and for the countries involved in the project, delivering very cost-effective gas sources; to raise the transit profile of the participating countries along the route; to contribute to the security of supply for all partner countries, and also for Europe as a whole; to strengthen the role of the gas pipeline grids of all the TAP partners by enabling them to connect with the European gas network.

According to projections, second stage of developing Shahdaniz, the country’s largest gas field in the Caspian Sea’s production will be brought up to 25 billion cubic meters per year which is expected to produce first gas in 2019. The Shahdaniz field holds estimated reserves of 1.2 trillion cubic meters of gas.

The fact that along with taking the natural gas to the Turkish market, TANAP will also transport a greater volume of gas to the Turkish-Greek border and from this point the gas will be exported to the European market via the TAP project.

TANAP will take 6.6 billion cubic meters of gas to the Turkish market and then, it will be capable to carry 10 billion cubic meters of gas annually to European market via TAP project. At the next stages, it will reach to 20 billion cubic meters. It is likely that gas export to Europe might be increased after the commissioning of Azerbaijan’s Absheron field. In this regard, the Turkish Stream gas pipeline is not a viable alternative to TANAP.

TANAP project will allow Azerbaijan to obtain a new market in Europe. This project will also increase Azerbaijan’s role as an important energy exporter empowering Turkey as a transit country. Turkey and Azerbaijan are the key countries in TANAP project that will deliver Shah Deniz gas to the Turkish-Greek border from eastern Turkey.

Once again, above mentioned factors confirm that Azerbaijan plays key role in promoting of the Western energy security. Meanwhile, as an independent expert, I would also underline that despite of the role of Azerbaijan’s in the regional energy security, there is no enough political support particularly on solving of Karanakh Conflict. The conflict is still unsolved and the US has to increase its role in the conflict resolution process.

Coming to the end of my speech, I would also like to add that new stage in the energy cooperation between Azerbaijan and the West will start in 2019 after the natural gas from the Shahdeniz 2 Phase will be started producing. Afterwards, Azerbaijan will become a new single alternative source for Europe.

Thank you for the attention.”

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