TODAY.AZ / Business

US analyst: I think that there is no chance for Nabucco pipeline without Azerbaijan

22 June 2011 [16:00] - TODAY.AZ
Interview with Dmitry Primus Gorenburg, Director of the American Association for the Advancement of Slavic Studies (AAASS) and Associate of the Davis Center for Russian and Eurasian Studies at Harvard University.
What is the best way for Azerbaijan to develop and ensure its energy security – the way towards Europe or towards pro-Russian projects?

While I would not presume to tell Azerbaijan how to manage its energy policy, it seems to me that the best option for Azerbaijan is to have a variety of options for energy export. If Russia was the only significant route for natural gas sales, Azerbaijan could end up in a similar situation to Turkmenistan in 2009 -- when a pipeline explosion and subsequent contract dispute led to a virtual halt to natural gas exports for 9 months. Turkmenistan now has multiple export options -- with routes to Russia, Iran, or China already active and TAPI and Nabucco still under consideration.

Azerbaijan has had an export diversification policy in place for a long time -- it can export petroleum via the BTC pipeline to Turkey, the Baku-Supsa pipeline to Georgia, or the Novorossiysk pipeline to Russia. For natural gas, there is the South Caucasus pipeline to Turkey, the Mozdok pipeline to Russia and the Astara pipeline to Iran. So there is already a variety of options.

For Shah Deniz phase II, it seems that the main thing is to avoid creating a situation where Azerbaijan feels beholden to one country for almost all of its export. If Nabucco is financially feasible, that might be a good option as it would involve a consortium of companies from several countries. If Nabucco doesn’t happen, it may make sense to split exports between a smaller pipeline to Europe via Turkey and an expansion of exports to Iran and/or Russia. Also, it may make sense to incorporate Gazprom into the Nabucco project -- to reduce the political competition over routes and perhaps improve financing prospects.

As Nabucco project companies from the five transit countries signed the Project Support Agreements (PSAs) in Turkey this month, there are still some concerns in the West, if Azerbaijan might not join the gas pipeline? What are the prospects for the project if Azerbaijan doesn’t join?

I think that there is no chance for the pipeline without Azerbaijan. Even with Azerbaijan, there is not enough gas for the pipeline without the participation of another major supplier such as Turkmenistan, Iraq, or Iran. I am not yet convinced that this pipeline will be built in the next few years.

Another question is if the unresolved Caspian Sea status could be an obstacle to energy cooperation in the Caspian region?

Obviously, this is an obstacle to energy cooperation. For Azerbaijan, disputes with both Turkmenistan and Iran have prevented the exploration of promising offshore fields at Kiapiaz/Serdar and Alov/Araz respectively. Furthermore, the lack of an agreement on delimitation may hinder or even prevent the building of a trans-Caspian pipeline to supply Turkmenistani natural gas to the future Nabucco pipeline. My sense is that the conflict with Turkmenistan can be settled relatively quickly once both sides feel they have an incentive to do so. The dispute with Iran is more intractable and less likely to be resolved in the near future, unless the other four Caspian states all unite on a proposal for Caspian border delimitation and Iran feels that it would be isolated unless it agrees. There is even some danger of military conflict between Iran and Azerbaijan, if Iran takes further steps to start exploration in disputed areas.

Another concern for the region is how to keep the Caspian energy projects safe? How effective do you see the idea of creating a single armed grouping on the Caspian Sea by all five countries for the joint resolution of common threats?

I find this very unlikely to happen. Al of the littoral states are more or less suspicious of each other. And if such a grouping was formed, what threats would it guard against? The main conflicts in the region are among the littoral states not between them and outsiders... In any case, the greatest threats to energy infrastructure are not military in nature. There’s a possibility of sabotage or terrorist attack, but the greatest threat is from a malfunction or an accident.

So the most important steps to take to keep Caspian energy projects safe are to build up disaster response capabilities -- so that if there is a problem with an offshore platform, whether because of accident or sabotage, the impact on the sea can be limited and production can be restarted as quickly as possible. There has been some progress in Azerbaijan for establishing a process for dealing with maritime emergencies, but the Ministry of Emergency Situations would probably need to have more modern ships and helicopters for more effective disaster response, as well as improvements in its command center. Furthermore, this is an area where cooperation among the five states is very limited but could lead to significant benefits if it were to be extended.

The second key aspect of energy infrastructure security is to improve security for offshore platforms, to prevent the possibility of sabotage. This includes better access control and more modern security equipment, as well as increase the effectiveness of maritime domain surveillance to detect approaching threats while there is still time for the navy or coast guard to respond. Both of these sets of measures would do much more keep Caspian energy projects safe than increasing the strength of naval forces, either unilaterally or in a joint grouping.


/APA/
URL: http://www.today.az/news/business/88852.html

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