By Ayya Lmahamad
The liberation of Azerbaijan’s territories from the Armenian occupation in the 44-day war not only restored the safety of the South Caucasus region but also presented vast opportunities in terms of economic cooperation and regional integration.
Almost two months after restoring its territorial integrity, Azerbaijan has launched a number of projects of regional importance that will ensure greater integration and cooperation of the regional countries. Baku has also offered a new format of regional cooperation that will involve six regional countries, including Armenia.
Gas pipeline from Turkey to Nakhchivan
A major post-war project is the construction of a gas pipeline from Turkey’s Igdir region to Azerbaijan’s Nakhchivan Autonomous Republic. The pipeline will embark the latest example of broader energy cooperation between Azerbaijan and Turkey.
The project was launched after a trilateral peace agreement signed by the Azerbaijani, Russian and Armenian leaders on November 10, under which all the economic and transport communications in the region will be unblocked. Furthermore, the document ensures the construction of new transport communications linking the Nakhchivan Autonomous Republic with the western regions of Azerbaijan. Under the signed deal, Armenia will guarantee the security of transport communications between Azerbaijan's western regions and Nakhchivan to ensure the smooth movement of people, vehicles and cargo in both directions.
The pipeline will run from Turkey’s eastern Igdir region to Nakhchivan through Azerbaijan’s newly-liberated territories, thus ensuring the exclave’s energy security. The Igdir-Nakhchivan natural gas pipeline represents the European leg of the Southern Gas Corridor and connects with the TANAP (Trans-Anatolian Natural Gas Pipeline).
Azerbaijani Energy Minister Parviz Shahbazov and his Turkish counterpart Fatih Donmez signed a memorandum of understanding on the Igdir-Nakhchivan natural gas pipeline in Ankara on December 15.
The total length of the pipeline is expected to be 160 km, while the throughput capacity will be 500 million cubic meters per year, which will make it possible to supply 1.5 million cubic meters of gas to Nakhchivan on a daily basis. The Turkish section of the pipeline will be 85km in length.
With the implementation of new projects, Azerbaijan continues to strengthen energy ties with Turkey.
Moreover, the shortening of transportation time and the route will be profitable both for Azerbaijan and Turkey in terms of trade opportunities. In addition, the project will enable Turkey and Azerbaijan connect with Central Asia, which will increase cooperation potential opportunities in the whole region.
During the signing of the memorandum, Donmez noted that with the construction of this gas pipeline, the residents of Nakhchivan will no longer have problems with gas, and this will further strengthen ties between the two countries.
Speaking about the importance of the memorandum of understanding, Shahbazov emphasized the strategic importance of natural gas supplies to Nakhchivan. He stressed that the signed document lays the foundation for the gas supplies to Nakhchivan via Turkey through the pipeline, and ensures cooperation between the companies of both countries (SOCAR and BOTAS) on technical, commercial, administrative, legal and other issues related to the natural gas supplies.
The gas supplies from Turkey to Nakhchivan will help diversify the gas supplies and increase the reliability of energy supply. Nakhchivan will be able to fully meet its growing energy needs with the support of Iran and Turkey, Shahbazov assured.
The plans to build a gas pipeline from Turkey to Nakhchivan were announced earlier in 2020. Azerbaijan failed to supply gas directly to the Nakhchivan Autonomous Republic, which is an exclave. However, the liberation of Azerbaijan's territories from the Armenian occupation made the implementation of the plans possible in Nakhchivan, which has a joint border with Turkey.
The project is regarded to be a very profitable one, as previously Baku had to consider supplying gas to Nakhchivan from Iran on a swap basis. The relevant agreement on the abovementioned gas supplies was signed during former Iranian President Mohammad Khatami's visit to Baku in August 2004. On December 2005, a gas pipeline was commissioned to bring natural gas in the amount of 1 million cubic meters per day to Nakhchivan.
Under the swap agreement, Azerbaijan supplies gas to Iran’s isolated northwestern border city of Astara, and in return, Iran supplies 85 per cent of that volume to Nakhchivan, with the 15 per cent differential acting as a transit fee.
The Igdir-Nakhchivan pipeline
The Igdir-Nakhchivan gas pipeline project will be operated by Turkey’s BOTAS and Azerbaijan’s SOCAR.
The two companies discussed the construction of a gas pipeline to Nakhchivan from Turkey back in 2010. Then Azerbaijan stated its readiness to bear the costs of the Igdir-Nakhchivan gas pipeline construction. In addition, it was assumed that the transportation of gas through Turkey would be free of charge for Azerbaijan.
The construction of the Igdir-Nakhchivan natural gas pipeline will take 12 months and will be accomplished in 2022, according to the Turkish energy minister.
The tender for the construction of the Igdir-Nakhchivan natural gas pipeline will come to an end in the first quarter of 2021.
Following the agreement achieved earlier this February between the Azerbaijani and Turkish presidents on the construction of a gas pipeline, BOTAS was tasked to conduct the engineering studies as part of the project. In October, BOTAS finalized this work and preparations are currently underway to hold a tender for the construction of the gas pipeline.
The Igdir-Nakhchivan project will improve Nakhcivan's energy security and it will be the first joint Azerbaijani-Turkish economic cooperation project to be realized in the Azerbaijani territories liberated from the Armenian occupation.
Kars-Nakhchivan railway project
Another project which will significantly contribute to regional integration is the implementation of the Turkish-Azerbaijani Kars-Nakhchivan railway project.
Earlier this year, Ankara announced its plans to build a new railway that would connect Turkey with Azerbaijan's landlocked Nakhchivan. The railway is set to expand the volume of the regional cargo and passenger transportation, and the capacity of the Baku-Tbilisi-Kars railway. Moreover, this railway is intended to be a part of a larger Baku-Tbilisi-Kars project.
With the construction of the railway, countries aim to increase the capacity of the Divrigi-Kars section from 5 to 20 million tons, and those increasing the capacity of the Baku-Tbilisi-Kars railway, with the initial capacity if 6.5 million tons of cargo and 1.5 million passengers a year.
The new Kars-Nakhchivan railway will be built based on the memorandum of understanding signed by the Azerbaijani and Turkish leaders during Turkish President Recep Tayyip Erdogan's visit to Baku in February 2020.
Azerbaijani President Ilham Aliyev described the construction of the new railway as very important, as Nakhchivan had been under blockade for many years due to Armenia’s aggressive policy.
“The delivery of products manufactured in Nakhchivan to foreign markets is a major problem,” the President said. “The construction of the Kars-Igdir-Nakhchivan railway would eliminate this problem, and this will contribute to the development and well-being of the Nakhchivan Autonomous Republic where the only land border between Azerbaijan and Turkey passes.”
Aliyev also spoke about further activities to successfully progress the autonomous republic.
“Three years ago, we prepared a list of goods that can be exported from Nakhchivan to Turkey. We are grateful for that as well and I am sure that the number of export operations from Nakhchivan to Turkey will increase in the future,” he said.
Additionally, the Kars-Nakhchivan railway will contribute not only to the delivery of products manufactured in the Nakhchivan Autonomous Republic, but also will be profitable for Turkey’s farmers and manufacturers.
Thus, earlier in 2017, former Turkish Minister of Transport, Maritime and Communications Ahmet Arslan noted that some of the farmers’ products in the eastern provinces of Turkey fall into disrepair and never reach the consumer. He underlined that this problem can only be solved by the means of railway transportation, which will make it possible to supply Turkish agricultural products to Kazakhstan, Turkmenistan and further to China.
It is worth to note that this railway can transform Nakhchivan into a center of attraction in the region, becoming a so-called free trade zone, and the economic and trade route on the west-east axis.
Wider access to world markets
With the construction of the new railway, cargo trains, after reaching Kars, will be able to continue moving along the Baku-Tbilisi-Kars railway in the direction of Kazakhstan with the access to northern China or use an alternative railway through Azerbaijan, Iran, Pakistan, India and the south of China. Thus, the new railway will expand the regional economic cooperation with the wider access to world markets. It will expand the world’s transport map and strengthen Azerbaijan’s position in the world markets.
This route can be considered to be a good alternative to the Baku-Tbilisi-Kars railway, which was put into operation in 2017. This strategic project was also launched thanks to the political will of the Azerbaijani and Turkish leaders. The 828-km railway stretches from the Azerbaijani coast of the Caspian Sea to the Georgian capital, and from there to Turkey, gaining the access to the European borders.
The Baku-Tbilisi-Kars railway is the shortest and most reliable route connecting Europe with Asia, becoming an important part of Eurasia's transport map, and turning Azerbaijan into a regional transport corridor. The construction of the Kars-Nakhchivan railway will contribute to the “One Belt, One Way” project, which is also called the new Silk Road as the latter will have more alternative routes for cargo transportation. Azerbaijan, which plays the role of a bridge between the Asian and European regions, will play an important role as a logistics centre, hub and bridge in the implementation of the “One Belt, One Way” project.
In addition to this route, the parties of the project, also mull to activate an alternative railway line that will run to Nakhchivan and further to Iran. Thus, it will make it possible to supply not only to the Iranian market, but also to Pakistan, India and the south of China.
Iranian Minister of Roads and Urban Development Mohammad Eslami noted that the construction of a railway connecting Nakhchivan with other territories of Azerbaijan will improve Iran’s potential for freight and passenger transportation for the North Caucasus and Europe. He underlined that connecting the railway line from Nakhchivan with the Tabriz-Haveran road is an extremely important step.
New format of regional cooperation
Azerbaijan, along with Turkey has offered a new regional cooperation format that would involve all six countries in the region, including Armenia.
President Ilham Aliyev announced Baku's willingness for a new regional cooperation platform at a press conference on December 10.
"We must create a new platform for cooperation in the region. First statements have already been made. This can be a multilateral platform. Countries across the region participating in this cooperation platform can only benefit from this," Aliyev said.
Speaking about the importance of a new transport corridor, Azerbaijani President Ilham Aliyev in his speech addressing the nation on November 10, underlined that this is a historic achievement and all countries will only benefit from it.
“We are taking Nakhchivan out of being encircled and, at the same time, opening a new transport artery… Azerbaijan is establishing a connection with one of its integral parts, Nakhchivan,” he noted.
The president also expressed Baku's willingness to involve Yerevan in the regional cooperation urging an end to the enmity between the two countries.
“Armenia, if it wants, may also join this corridor. Thus, a new five-sided cooperation platform can be created in the region,” the president stated.
Similar ideas were voiced by Erdogan who said he attaches great importance to the six-sided cooperation platform.
“What is a six-sided platform? Russia, Turkey, Azerbaijan, Iran, Georgia, and Armenia – if it accepts and corresponds to it – then it can also get a place on this platform. So there are plans to build a regional peace through a six-party platform,” he underlined.
Azerbaijan's new transport and energy projects as well as its willingness to increase the number of regional project with the involvement of all regional countries is a good step towards broader regional cooperation and integration. Baku's initiatives for regional cooperation will yield results in unblocking transport communications and make the region a safer and more prosperous place.
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