New economic window for Baku-Ankara cooperation

New economic window for Baku-Ankara cooperation

The energy cooperation is one of the core issues in bilateral relations of Azerbaijan and Turkey. The implementation of joint energy projects, such as TANAP, Baku-Tbilisi-Kars railway project is highly important in this regard.

Turkey’s high-ranking official put an end to rumors in Baku that Turkish Stream, Ankara’s joint project with Moscow, will compete with TANAP, Azerbaijan’s brainchild project.

During his one day visit to Baku, Nihat Zeybekci, Turkey’s Economy Minister stated that Turkish Stream has never been viewed as an alternative to TANAP. “These two projects differ from each other and will help Turkey strengthen its role in the region,” Zeybekci said.

Earlier the Turkish officials had voiced different ideas in this regard. Taner Yildiz, Turkish Minister of Energy and Natural Resources said after determination of the route of the Turkish Stream gas pipeline, a healthy competition would begin between it and the TANAP project.

Commenting on the issue, Vugar Bayramov, economic expert and Chairman of the Center for Economic and Social Development told AzerNews that Turkish Stream shouldn’t be viewed as an alternative to TANAP, which is regarded as an important project in terms of ensuring Europe’s energy security.

He said considering 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 can 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,” said Bayramov.

On the other hand, he stressed that the realization of the Turkish stream project is under doubt, as it requires investment by both the Turkish side and Russia.

Russia, after annulling its South Stream project, initiated the Turkish Stream, which envisages gas transport from Russia along the bottom of the Black Sea in the direction of the European part of Turkey.

“Given that Russia’s financial resources are limited after the Western sanctions, Moscow’s attempt to find sources to finance this project is unlikely to yield results,” said Bayramov.

However, Bayramov added that to some extent, Turkish Stream is a rival project to TANAP, because this project also envisages the transport of gas to Turkish and Greek market and further enter the European market. But he also noted that this is in no way means that realization of TANAP project put under question.

“As Europe unequivocally supports TANAP and TAP projects, its position in this regard will help implementation of these projects,” said Bayramov.

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.

Joint ventures in third countries

Azerbaijan and Turkey, which are the active participants of a number of major energy and transport projects, are also committed to speed up their economic relations with joint investments.

Azerbaijan’s economy minister has recently offered to Turkish side to establish joint ventures in the third countries. As the Azerbaijani-Turkish companies successfully operate in both countries, the two countries also can take benefits from the establishing joint ventures in third countries.

Commenting on this issue, Bayramov said the main point in establishing joint ventures will be the investments by the two countries. He said this will serve to expansion of the investments and contribute to entering of Baku and Ankara to the markets of the other countries and global arena.

“If we take into account the fact that currently there is strong competition between states, Azerbaijan and Turkey are trying to establish joint ventures that will be able to compete in global arena. In this regard, the two countries aim to make more investments in other countries through the competitive enterprises,” said Bayramov.

Another important project, realized by Baku and Ankara is the Baku-Tbilisi-Kars railway project, which is scheduled to be commissioned in 2015. After the implementation of the project it will significantly impact the economic situation in the region, as it will serve to intensifying the transaction between interested countries and involve more regional countries to project in future.

On the other hand, Azerbaijan could play an important role as a transit country linking the southern countries to northern ones, namely Turkey to Russia.

Turkey recently offered to exempt delivery of agricultural products exported to Azerbaijan from payment of customs duty. It is possible that Turkey, speaking about the benefits for its farmers through Azerbaijan wants to enter the markets of the third countries. In particular, Turkey has repeatedly stated its readiness to supply agricultural products to Russia, after Moscow banned the export of the European goods.

On the other hand, Iran is interested to supply its products to Russia via Azerbaijan.

Bayramov said as a transit country Azerbaijan will take a big advantage from Turkish and Iranian exports to Russia. Meanwhile it will contribute to the development of transport sector. He said Azerbaijan is interested in using its territory as a transit in terms of economic point of view.

Turkey is interested in raising the trade turnover with Azerbaijan up to $15 billion. Currently, Turkey is one of the main trade partners of Azerbaijan, ranking second in terms of exports. The trade turnover between Azerbaijan and Turkey at the end of 2014 amounted to $ 1,789 billion, while imports from Turkey to Azerbaijan was $ 1.3 billion and the exports to Turkey was 502.49 million.

The two countries managed to develop their political-economic cooperation to the level of strategic partnership and currently the Azerbaijani-Turkish relations are developing in all directions.

The friendly relations between Baku and Ankara are regarded as a successful example of a staunch alliance.

Considering the current trend of expansion of ties and important projects initiated and realized by the two countries, the Azerbaijani-Turkish collaboration is expected to further develop in the future.

By Sara Rajabova

Leave A Comment