Southern Gas Corridor: Progressing on goals

By Aynur Karimova

Resources rich Azerbaijan was once again on spotlight of international energy diplomacy, as Baku hosted the Southern Gas Corridor Advisory Council Second Ministerial Meeting on February 29.

The meeting, attended by the energy ministers and representatives of various organizations from the Southern Gas Corridor member-states, left no grounds for doubt: Europe considers Azerbaijan as a reliable partner able to ensure the continent's energy security, and it is ready to invest in this South Caucasus state.

Azerbaijani President Ilham Aliyev, who attended the meeting, emphasized the significance of holding this event and said it will focus on the work done in previous years and future tasks.

The president voiced belief that the implementation of the Southern Gas Corridor, which is the historic project of the 21st century, will make it possible to even more expand the beneficial cooperation between Azerbaijan, Georgia, Turkey and other countries.

Emphasizing that Azerbaijan remains committed to all its obligations and even more develops the principles of market economy, President Aliyev said energy cooperation cannot be a political requirement and this issue should be free of any political format.

Azerbaijan has repeatedly stated that the Southern Gas Corridor project is not directed against anyone. This project has only one goal - to deliver gas from point A - Shah Deniz field - to point B - the European consumers. This route should be operational, as well as commercially viable and reliable.

In this regard, according to President Aliyev, delays and obstacles in the implementation of the Southern Gas Corridor project should be prevented.

He believes that it is necessary to combine the efforts of the governments for overcoming all obstacles.

Today, energy security holds an important place in world politics and on the agenda of international organizations. The government of Azerbaijan has done a lot for gaining a status of a reliable supplier, which is able to ensure European consumers' energy security.

Being a reliable energy supplier depends not only on the country's abundant hydrocarbon resources and favorable geographic location, but also primarily on political stability and predictability.

Political stability and economic development allows Azerbaijan to initiate ambitious and large-scale projects such as the Southern Gas Corridor, as well as involve foreign investors to the implementation of these projects.

The Azerbaijani government, by pursuing stable domestic and foreign policy, is actively cooperating with the participants of the project, and energy cooperation plays an important role in relations with the EU.

The Southern Gas Corridor project, which was initiated by Azerbaijan, envisages a 3,500 kilometer journey of the gas extracted at the giant Shah Deniz field in the Azerbaijani sector of the Caspian Sea into Europe.

Under the project, the existing South Caucasus Pipeline will be expanded with a new parallel pipeline across Azerbaijan and Georgia, while the Trans-Anatolian pipeline will transport Shah Deniz gas across Turkey to meet the Trans-Adriatic Pipeline, which will take gas through Greece and Albania into Italy.

The first gas supplies through the corridor to Georgia and Turkey are given a target date of late 2018. Gas deliveries to Europe are expected just over a year after the first gas is produced offshore in Azerbaijan.

Addressing the event, Ian Bradshaw, TAP Managing Director said the groundbreaking ceremony for the 878 km TAP is expected to take place in late May-early June 2016 in Greek city of Thessaloniki.

“We have achieved great progress in Greece. With the help of the Government of Greece the pipes will be delivered by the end of April 2016, and the groundbreaking will start in the middle of the year,” he said, adding that Greece has provided necessary conditions for the successful start of the project.

European Commission’s Vice-President for Energy Union Maros Sefcovic, for his part, talked about the importance of delivering natural resources from the Caspian Sea to European markets and said the EU considers the energy security as an important issue, and there is a great interest in the Southern Gas Corridor project in South-Eastern Europe and Balkan states.

Sefcovic praised the interest and support to the Southern Gas Corridor by international financial organizations and noted that the EU supports this project.

In his remarks, Jan van Bilsen, the regional manager of the International Finance Corporation for the South Caucasus, said the Southern Gas Corridor is a landmark strategic project to open up gas supplies to new markets and contributing to energy security of the Southern-East Europe.

Bilsen noted that the IFC has not yet made an investment decision concerning the Southern Gas Corridor project. “We welcome an opportunity to participate in this meeting and to understand the potential role which IFC could play in the project,” he added.

Massimo D’Eufemia, the European Investment Bank's official representative, in turn, said the Bank is working closely with European Commission, and it is attaching highest consideration to the timely realization of the Southern Gas Corridor.

"As all the participants have stated, this project is key infrastructure for the region and also for Europe," D’Eufemia said, adding that the Southern Gas Corridor will secure new energy sources to Europe, as well as announce new competition in the gas market.

Azerbaijan's Energy Minister Natig Aliyev noted that the gas to be transported by the Southern Gas Corridor will play an important role in providing European countries with this fuel.

Emphasizing the great interest by such major European countries as France, Spain, Italy and Greece in this project, the energy minister said this project’s implementation will make it possible to create new jobs.

Further, Turkey’s Minister of Energy and Natural Resources Berat Albayrak talked about the importance of TANAP, which is a part of the Southern Gas Corridor project.

He noted that Turkey will continue to provide political, economic and technical assistance in this project’s implementation.

The U.S. State Department’s special envoy and coordinator for international energy affairs, Amos Hochstein also voiced his country’s support for the project.

The Southern Gas Corridor project is a form of true diversification of Europe’s energy security, he said during a press conference after the meeting.

While there are announcements from the energy sector companies on capital expenditure reductions, the private and government sectors confirm commitment to continue the Southern Gas Corridor project, said Hochstein.

“That is a strong statement of importance of this project that is going to be completed on time in this environment of the energy markets,” he added.

BP’s Regional President for Azerbaijan, Georgia and Turkey Gordon Birrell, in turn, said that all the goals regarding the Southern Gas Corridor will be reached on the schedule and 2016 will be an important period in the project’s implementation.

Document inked

Following the meeting, a joint declaration was undersigned by 12 ministers who took part in the meeting in the presence of President Ilham Aliyev and EU High Representative for Foreign Affairs and Security Policy, Federica Mogherini, as well as Vice-President of the European Commission for Energy Union Maros Sefcovic.

The document says the producers of energy resources, transit countries and consumers intend to develop and deepen prolonged strategic relations for reliable, secure and consistent provision of European markets with energy resources of Azerbaijan.

The document also approved carrying out of legal procedures and regulative measures by these countries for implementation of the Southern Gas Corridor project.

It was noted that existing and future opportunities for the expansion of the project beyond the EU, including the Balkans will be evaluated. For this purpose, a special interest is shown for projects of Greece-Bulgaria and the Ionian Adriatic Pipeline interconnectors.

The document supported strengthening of cooperation with national and international financial institutions to finance the project.

The sides will continue consultations at the level of bilateral and multilateral working groups for resolving issues that may arise in connection with the involvement of new suppliers or transit countries.

The above-mentioned statements and the signed document once again showed that Azerbaijan is successfully implementing its energy strategy. The country was again at the center of global energy diplomacy as an important partner.

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Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova

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