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Revenue windfall should result in increased human development and education

By Araz Abbasov
AzerNEWS Deputy Chief Editor

The European Union recently authorized the European Commission to open talks with Azerbaijan and Turkmenistan on the negotiation of the Trans-Caspian gas pipeline. The negotiations have begun in October.

The Trans-Caspian pipeline constitutes a part of the Southern Gas Corridor, which aims to bring gas from the Caspian and Middle East regions to European markets. Southern Gas Corridor comprises of projects such as Nabucco, ITGI, TAP, White Stream. The Nabucco pipeline involves a 3,863 km pipeline running from Turkey to the European gas hub in Austria, at a currently published cost of ˆ7.9bn.

In order to find answers to numerous questions regarding this project, we have approached Ambassador Roland Kobia, Head of the EU Delegation to Azerbaijan, who is also an expert on Caspian Region affairs.

Q. The European Union has launched talks with Azerbaijan and Turkmenistan in October on the planned trans-Caspian gas pipeline. Russia and Iran have opposed the project, citing a number of arguments - from political ones to environmental concerns. Given such a complicated geo-political situation in the region, in your opinion, what are the chances for a successful implementation of the EU's energy projects?

A. First, I wish to make clear that the Southern Gas Corridor project developed by the EU is a positive initiative, which is not directed against anyone. It is made "for", not "against". It aims at developing commercial relations between various independent partners, notably Azerbaijan, now Turkmenistan and the EU, who all wish to pursue their own national interests in doing business together. Nobody has the right to prevent that is this is the sovereign wish of the parties. The idea behind it is to directly link the EU gas market to the largest gas reserve region in the world, i.e. the Caspian Sea basin and the Middle East. The European Union has devoted many efforts and taken a pro-active approach in implementation of this initiative. The relations, notably between EU and Azerbaijan, have greatly intensified in the recent past. A vivid example is that, in January 2011 President Barroso, together with Commissioner Oettinger, travelled to Azerbaijan and Turkmenistan, and signed with President Aliyev a Joint Declaration on the Southern Gas Corridor in which Azerbaijan makes a commitment to enable its opening. Shortly after this visit, all 27 EU Heads of State and Government, at the Special Summit on Energy of 4 February 2011, unanimously affirmed the strategic importance of the Southern Gas Corridor to Europe. Commissioner Oettinger has been a driving force behind these developments.

As I hinted above, now Turkmenistan has also expressed a clear interest in selling gas to Europe. The European Commission was again unanimously, by all 27 Member States of the EU, granted in September this year a mandate to negotiate a trilateral Agreement between the EU, Azerbaijan and Turkmenistan to establish a legal framework for the development of the Trans-Caspian pipeline system. The EU has decided to pursue Southern Gas Corridor not only to ensure its energy security but also to intensify the relations between the Caspian countries and bring the Caspian region closer to Europe. The European Union is committed to conducting an open and constructive dialogue with all its partners, including third parties like Russia, another important strategic partner of the EU. We believe the Trans-Caspian pipeline project is a right that the concerned countries have, and that it will have a beneficial impact on the region. It is apparent that the EU, Turkmenistan and Azerbaijan all agree on the same end-point: long-term and predictable relations building on the successful creation of a Trans-Caspian gas Pipeline, with additional and new volumes of gas coming across the Caspian Sea to Azerbaijan, with onward transmission to the European Union.

Q. How would you evaluate the arguments from Russia and Iran against the trans-Caspian gas pipeline, which they say not only poses an environmental threat but could also impede the solution of the legal status of the resource-rich Caspian Sea? Moscow and Tehran also often point out that all Caspian littoral states previously agreed that until the status issue has been resolved, any activity at sea must be coordinated among all coastal nations. What are your views in this regard?

A. Our EU culture is one of respect; we always carefully listen and take account of arguments expressed by others. In this particular case, we believe there are neither legal nor environmental obstacles to the realization of the Trans-Caspian project and the view expressed by some parties that a pipeline between Turkmenistan and Azerbaijan requires the approval of all five Caspian states is not shared by the EU, nor is it shared by Azerbaijan and Turkmenistan. This means that all parties directly involved share the same view. It goes without saying that before any decision on the building of a Trans-Caspian pipeline is taken, a comprehensive and fully independent environmental impact assessment will be made. Environment is a key concern for us. So far, based upon the data made already available and acquired for EU-funded studies, no individual environmental issue has been identified that would make a Trans-Caspian Sea Gas Pipeline scheme unfeasible. In fact, a gas pipeline across the Caspian could be expected to have a relatively low environmental impact compared to other routes, or other types of hydrocarbon export schemes. As our project comes after a long energy tradition in the Caspian, and as thousands of kilometers of sub-marine pipelines have been built notably by our Russian friends in the past to transport oil and gas, we can benefit from that wide experience.

I also have to underline that we do not wish to interfere in anything the 5 Caspian States negotiate. The EU mandate to negotiate a Trans-Caspian pipeline does not affect the ongoing debate around the legal status of the Caspian basin since the laying of a pipeline does not prejudge any further decision on that status. It does not touch upon the key points under discussion among the Caspian littoral states such as seabed demarcation, maritime routes, sharing of resources and border management. The negotiating directives in no way impinge on any of the issues which the Caspian littoral states still need to agree upon amongst each other as the EU mandate is limited to the legal framework for the laying of a pipeline and the transit conditions which will apply to gas flowing through that pipeline.

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