Today.Az » Politics » Continental gas hub: Turkmenistan and Turkiye choose Azerbaijan
21 May 2024 [14:00] - Today.Az

By Leyla Tarverdiyeva

Last week, Turkish Minister of Energy and Natural Resources Alparslan Bayraktar met with Azerbaijani Minister of Economy Mikail Jabbarov in Istanbul. As a result of the negotiations, an agreement was signed to increase the capacity of several gas pipelines, and an agreement was reached on gas supplies to Turkiye through Azerbaijan and Georgia. The exact volumes have not yet been announced, but it is known that this deal should ensure the supply of additional volumes of gas from Azerbaijan and the Caspian region to Turkiye and Europe by 2030.

It has not yet been announced how Turkmen gas will reach Azerbaijan. These issues are being worked out. Currently, there are no specific agreements regarding the construction of the Trans-Caspian gas pipeline. There is great interest in this project in the West, both in Europe and in the USA. However, the project is very expensive, and it is of the greatest interest to the mining countries of Central Asia, not Azerbaijan. Therefore, Baku does not force the issue and expects practical steps from the Central Asian partners.

Turkmenistan is very rich in gas, but does not have the capacity to export it to Europe. In turn, Turkey has set a goal to become the gas hub of the continent, and connecting Turkmenistan to this network would allow expanding the volume of gas flowing from east to west through Turkish territory. In addition, the issue of Turkmen blue fuel is increasingly worrying Europe, and Ankara does not want to cede a key role in these operations to anyone. Although, we repeat, we cannot talk about large-scale supplies yet due to the lack of a gas pipeline from Turkmenistan to Azerbaijan.  

Most likely, we are talking about a swap supply chain. Turkmenistan and Azerbaijan already have similar experience. In November 2021, Azerbaijan, Turkmenistan and Iran signed a natural gas exchange deal providing for the supply of 1.5-2 billion rubles to Azerbaijan. cubic meters of gas per year. Deliveries began in January 2022 with a volume of 5-6 million cubic meters per day. By March of the same year, the daily volume of gas pumping had increased to 7 million cubic meters. The supplied gas was intended for the domestic needs of Azerbaijan. Six months later, Baku and Tehran agreed to double the supply of Turkmen gas through Iran's gas pipeline system. In January 2024, supplies were suspended due to the fact that Ashgabat and Baku could not agree on the volume and cost of gas. Some linked this to anti-Iranian sanctions, but the United States clarified through its ambassador in Ashgabat, saying that swap shipments in transit through Iran do not violate American sanctions. And in the future, Turkmen gas can go to Turkey through Iran and Azerbaijan.

The agreements between Baku and Ankara were preceded by negotiations held in March this year between Chairman of the Halk Maslahaty of Turkmenistan Gurbanguly Berdimuhamedov and Turkish President Recep Tayyip Erdogan.

"Swap deliveries of Turkmen gas to Azerbaijan are not news," reports, citing with reference to the comment of an expert on economic issues and head of the Center for Petroleum Research of Azerbaijan, Ilham Shaban. According to him, the swap supply deal concluded in 2021 was aimed at supplying gas for the domestic needs of Azerbaijan. It allowed the country to avoid a shortage of gas in the domestic market, while continuing to fulfill its obligations to export to Europe.

"The current agreement opens a new page in the energy history of Azerbaijan. Since 2007, our country has become an exporter of natural gas, and today we can turn into a transit country of natural gas for the first time.

In January, representatives of the state-owned gas companies BOTA? (Turkey) and Turkmengaz (Turkmenistan) met in Ankara. And in March, a document on the purchase and sale of Turkmen gas was signed between the parties. After that, the Turkish government, having analyzed various routes for the delivery of Turkmen gas to the Turkish market, settled on transit through Azerbaijan. Why? Because there is all the necessary infrastructure for transit, sufficient for the expected volumes - in the region of 2 billion. cubic meters per year. And most importantly, because this is a tried and tested option. It has the least risks, as the energy partnership between Turkey and Azerbaijan has been tested for years," said Ilham Shaban.

According to analysts, the agreement concluded between Baku and Ankara on the transit of Turkmen gas may once again bring the Trans-Caspian gas pipeline, which has been almost forgotten recently, to the agenda. Direct supplies from Turkmenistan to Azerbaijan via this route would significantly increase exports. According to preliminary estimates of experts, the Trans-Caspian gas pipeline will transport from 10 to 30 billion tons. cubic meters of gas per year.

After the signing of the Convention on the Legal Status of the Caspian Sea in 2018, the biggest obstacle to the implementation of this project disappeared - opposition to it from Russia and Iran. According to this document, called the "constitution of the Caspian Sea", now the consent of all Caspian littoral countries is not required for the construction of communication along the seabed. The consent of those countries whose sectors are affected by the project is sufficient. However, the best time to implement such a project is probably gone, given that Europe is betting on green energy, and international financial organizations have stopped financing hydrocarbon projects. Turkmenistan has been thinking for a very long time.

But this does not mean that nothing needs to be done. Abandoning fossil fuels is not a matter of the near future, no matter how much European importers would like to think so.

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