Azernews.Az

Qabil Ashirov

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Azerbaijan’s appeal to Chinese energy companies is increasingly measurable in ships, tonnes and transit capacity. For instance, cargo moving through the Trans-Caspian route has risen roughly fivefold in seven years to about 4.5 million tonnes, while Azerbaijan’s transport infrastructure is being upgraded to handle much larger flows between China, Central Asia and Europe. That logistics base is now intersecting with the country’s offshore energy potential, giving China National Offshore Oil Corporation (CNOOC) a strategic proposition that extends well beyond access to oil and gas.

The memorandum between Azerbaijan’s Ministry of Energy, SOCAR and CNOOC therefore arrives at a point when the Caspian is becoming more important both as an energy basin and as a link in China’s westward trade strategy. For Beijing, Azerbaijan offers something that few markets in the region can combine in one geography: established offshore production, energy infrastructure, a deepwater commercial port and direct participation in the Middle Corridor connecting China with European markets.

Azerbaijan’s energy sector remains anchored in the Caspian, where mature offshore fields increasingly require capital, technology and more sophisticated recovery techniques. CNOOC brings experience in offshore exploration and production that could help address the technical challenges associated with ageing assets, while cooperation with SOCAR allows the risks and investment requirements of future projects to be shared rather than carried solely by the Azerbaijani state.

But the larger attraction may be the infrastructure surrounding those fields. The Port of Baku at Alat has an initial cargo handling capacity of 15 million tonnes a year, expandable to 25 million tonnes, placing Azerbaijan at the centre of a logistics system designed to absorb growing east-west trade. The port is complemented by the upgraded Baku-Tbilisi-Kars railway, whose capacity has been increased from about 1 million tonnes to 5 million tonnes annually, while Azerbaijan’s rail operator ADY has been expanding its wagon fleet to accommodate rising transit demand.

Those assets give Chinese companies a commercial reason to look at Azerbaijan differently. The country is not simply a destination where Chinese capital can finance an offshore project. It can also serve as a logistics platform through which equipment, commodities, and manufactured goods move between Asia and Europe. China’s growing use of the Middle Corridor reinforces that proposition, with 225 block trains arriving from China in the first seven months of 2025 alone, according to Azerbaijani data.

Moreover, the CNOOC agreement points towards a broader energy relationship. Discussions covering green energy and offshore wind could give Chinese companies an opening into Azerbaijan’s emerging renewable sector, where Beijing has considerable advantages in manufacturing, project finance, and supply chains. Azerbaijan has set a target of raising renewable energy’s share of installed capacity substantially by 2030, while positioning itself as a potential supplier of green electricity to European markets.

For SOCAR, meanwhile, cooperation with CNOOC offers a route to international expansion. The possibility of joint upstream projects in third countries would allow the Azerbaijani company to combine its regional experience with China’s financial and technical capacity, potentially extending the partnership beyond the Caspian.

The strategic calculation is consequently straightforward: Azerbaijan gives Chinese companies access not to a single asset, but to an interconnected portfolio of energy, ports, railways and regional trade routes. In fact, this combination is becoming an increasingly valuable economic asset as supply chains are not in proper order and, therefore, companies seek alternatives to established routes. This is the reason why the Caspian is a much more consequential part of China’s Eurasian strategy.