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US analyst: â€œThe TransCaspian link makes Azerbaijan not just a supplier of gas to Europe but a major transit hub as wellâ€

19 January 2011 09:11 (UTC +04:00)

Washington. Isabel Levine â€“ APA. â€œAzerbaijan has a role to play in ensuring regional and European energy security, and as such, its impact on global energy trends will be a positive oneâ€, Borut Grgic, a senior fellow at the Washington DC based Atlantic Council and the founder of the TransCaspian Initiatives told APAâ€™s US correspondent.

Mr. Grgic believes that Azerbaijanâ€™s balanced energy policy, as well as cooperation with Iran, Russia will not harm the energy cooperation between Azerbaijan and the West.

â€œNaturally Azerbaijan will look to sell its energy in all directions. It is a good strategy politically, and commercially, as Iran is offering a market price for the gas. Second, the energy relationship with Iran is especially important to Baku because of the gas swap agreement it has with Tehran for Nakhchivan. Coming to Russia, actually, it will enhance it as Russian-Azerbaijan energy cooperation is ideal for a vibrant Azerbaijan-EU energy partnershipâ€, he mentioned.

Commenting on Nabucco pipelineâ€™s future after the last developments - European Commission President Jose Manuel Barrosoâ€™s recent visit to Baku and Ashgabat - the analyst said that it is difficult to speculate on the construction of the Nabucco.

â€œWhat is clearly evident is that political support the project enjoys at the highest levels both in Europe and in the region. In the end, I think the commercial side of the equation will be decisive. Where can the SH consortium members get the best price for their gas, the longest contract, and how much will be the transit tariffâ€, he said.

According to Mr. Grgic, there are at least three alternative routes proposed, besides Nabucco, for getting the initial Azeri gas to Europe; most of them are shorter, which probably means the tariffs are less burdensome on the end user.

â€œAs to Azerbaijan’s commitment to making the TransCaspian project a reality, I think on the political side the support and effort Azerbaijan has showed is extraordinary. This is not surprising, given that the TransCaspian link makes Azerbaijan not just a supplier of gas to Europe but a major transit hub as well. As for Turkmenistan, it is hard to tell what gas and when it will be available for EU consumption. This is not to say that the Turkmen government is not interested in a TransCaspian option; it is. But for them it’s even more a fine political dance they have to performâ€, he pointed out.