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American expert: Azerbaijanâ€™s gas export to Iran and Russia is direct result of Western inaction - EXCLUSIVE

American expert: Azerbaijanâ€™s gas export to Iran and Russia is direct result of Western inaction - <font color=red> EXCLUSIVE</font>

07 January 2010 12:44 (UTC +04:00)

- Europe still depends on Russia in terms of energy, NABUCCO is still not there, while Turkey and Iran are planning to cooperate in the energy sphere, how do you estimate Azerbaijanâ€™s this situation? How stable is Azerbaijan as a gas supplier for Europe?

- Azerbaijan is still a pivotally important energy player in Eurasia and an indispensable producer country for EU natural gas consumers. That said, uncertainties about Turkmenistan’s role in the Nabucco project, the gas transit dispute between Azerbaijan and Turkey, and lack of initiative on the part of the EU and its member state governments to push for alternative routes to alternative sources of natural gas in the Caspian, has caused the Nabucco consortium to plan for initial gas to be sourced in northern Iraq, with potentially more gas coming from elsewhere in the Middle East. That decision could mean that Azerbaijan becomes the end of the line for gas to be supplied to Nabucco, as opposed to both a supplier and a bridge to the resources of Turkmenistan. This is of course not certain, but it could be the case. This decision, combined with the potential for unconventional gas development within the EU, and lower demand at the moment, means that European decision-makers feel that Caspian reserves are not as important as they once were. For Azerbaijan, the question is whether it will remain just an important gas supplier, or become to key to the riches of the Caspian.

- In your view, what should be the primary factor in the gas price talks between Azerbaijan and Turkey?

- It is tempting to say that the deciding factor in the gas price talks between Azerbaijan and Turkey should be commercial concerns. Ideally, both sides would be able to come to a workable agreement based on a win-win business deal. That said, since we are talking about natural gas in the geopolitically-charged Black Sea-Caspian region, it is inevitable that strategic realities will enter into the negotiations. In this case geopolitical considerations present a solution. When looking at the bigger picture, it is clear that Caspian gas going to EU markets through Turkey is in the interests of both Baku and Ankara. This is one energy discussion that should be elevated to the high-political level to be resolved on the basis of strengthening Turkey’s status as an energy hub and Azerbaijan’s role as a key supplier of gas for the EU.

- Recently, Azerbaijan and Iran also have agreed to establish cooperation in gas sphere. In your opinion, can this agreement be considered long-term? Wouldn’t this transport of Azerbaijani gas be negative for the NABUCCO project?

- Azerbaijan will most likely export gas not only to Iran, but also to Russia this year. This is a direct result of Western inaction in realizing the Southern Corridor, the central project of which is the planned Nabucco pipeline. It is a testament to the rapid and comprehensive energy development of Azerbaijan that it is exporting to Iran, which holds far greater gas reserves but does not have the necessary infrastructure to supply its own population, and Russia, which only a few years ago used to export gas to Azerbaijan. So far, however, it looks like the Azerbaijani gas exports planned for this year will not be at volumes large enough to threaten the planned supply of Nabucco. But, Western policymakers should not take comfort in that fact. Baku can step up its exports north and south and will do so if action is not forthcoming from Turkey, the EU and the U.S.