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US Atlantic Council Eurasia Energy Center Associate Director Alexandros Petersen: â€œSo far, Azerbaijan’s energy policy has been deft and carefully managedâ€ - INTERVIEW

14 January 2011 09:33 (UTC +04:00)

Washington. Isabel Levine â€“ APA. APAâ€™s Washington DC correspondentâ€™s interview with Alexandros Petersen, Associate Director of Eurasia Energy Center at Atlantic Council of the United States

- European Commission President Jose Manuel Barroso had been in Azerbaijan and Turkmenistan this week in order to discuss Nabucco gas pipeline project and other energy issues. What are the prospects of energy cooperation between EU and these both countries? Turkmen gas supplies are still in the air. How cooperative is Azerbaijan in this respect?

- While Barroso’s meetings move all players closer to achieving a working Southern Energy Corridor, they do not necessarily favor or indicate which of the three Western-oriented projects will actually be realized. Nabucco is the project that is most often discussed, but it is perhaps more likely that one of its smaller rivals will be built. Interconnector Turkey Greece Italy (ITGI) is the smallest and cheapest, but is in many ways not a strategic project because of its limited scope. The Trans-Adriatic (TAP) pipeline is a medium-sized project that is flexible in its capacity, with the key option for reverse flow. Importantly, neither of the smaller pipeline projects requires Turkmen gas - just Azerbaijani resources. Precisely because the attainment of Turkmen gas is still up in the air, ITGI and TAP are better placed to take advantage of Azerbaijan’s firm commitment to the Southern Corridor.

- On the other hand, just recently Baku and Tehran have signed a five-year agreement on the supply of Azerbaijani natural gas to Iran. What is your assessment of Azerbaijan-Iran energy cooperation?

- The agreement between Baku and Tehran is limited and at 1bcm should not present a significant challenge to the construction of the Southern Corridor or its future expansion. Azerbaijan’s leadership is smart not to put all of its eggs in one basket, but it is also geopolitically astute enough not to unbalance its relationship with European and other Western actors by throwing too much weight into its relations with Iran.

- Russia is also at the stage - Azerbaijan has been strengthening energy cooperation with Moscow as wellâ€¦

- My assessment is that Baku is mainly strengthening its relationship with Moscow to put pressure on policymakers and investors to move forward more quickly with the Southern Corridor. Closer energy cooperation with Russia is in no one’s interest but Moscow’s.

- On the whole, what is your assessment of Azerbaijan’s current energy policy in the Caspian region? Does Azerbaijan have the potential to be involved in ensuring global energy security?

- So far, Azerbaijan’s energy policy has been deft and carefully managed. It is very important that Azerbaijan position itself not just as a producer, but also as a transit country for reserves on the eastern side of the Caspian. These efforts are already underway, but can be stepped-up by building a closer relationship with Turkmenistan - specifically finding a workable solution to the Serdar/Kapaz dispute. Cooperation with Kazakhstan is going well, but could be made more substantial, establishing the Southern Corridor as a more important export route for Kazakhstani resources. By serving as the corridor through which eastern Caspian resources, including those of Uzbekistan, can reach world markets, Azerbaijan can contribute significantly to global energy security.