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US analyst: â€œMoscow has less and less leverage in the energy realmâ€

29 September 2011 09:23 (UTC +04:00)

- Just recently the French Total has announced discovering a major gas field in the Caspian Sea, in Azerbaijan’s sector. What could be the Absheron fieldâ€™s contribution to Azerbaijanâ€™s energy security?

- In general, the Absheron discovery is a potentially strategically important event for European consumers. It means that there is more confirmed alternative natural gas available in the Caspian, to be developed by Western companies and piped to Western countries. Azerbaijan was already the focal point of European energy security opportunities and Absheron’s development will only confirm that top spot. Although it will take a decade or so for Absheron gas to become available, this timeline probably fits well with those of the Southern Energy Corridor projects under consideration.

- A lot is being said about the Nabucco project and Azerbaijanâ€™s role in it, but no real steps were taken, why is that? Will the discovery of Absheron improve Nabuccoâ€™s chances?

- The real question is what are the implications for the expansion of the Southern Energy Corridor. Nabucco is just one of three major projects competing to bring gas from the Caspian to European markets through the Corridor. The first of October is in fact a milestone in moving the Corridor’s vision forward, when each of the projects: IGI, Nabucco and TAP will be submitting tariff and commercial transit terms to the Shah Deniz consortium with a view towards the consortium picking a project before the end of the year. The Absheron gas field will certainly factor into these considerations - especially as it shares stakeholders with Shah Deniz - but the consortia developing the two projects are different. For now, a Southern Energy Corridor project will probably move forward based on Shah Deniz II development. The real question is about whether the next stage will be to link in Absheron gas or build a Trans-Caspian gas option - or both.

- Russia says EUâ€™s decision to give a mandate to the European Commission to negotiate on the legal framework for a Trans-Caspian gas pipeline with Azerbaijan and Turkmenistan as third party intervention in the Caspian Sea sector. Does this sound like there could be an energy war in the Caspian Sea?

- Russia’s reaction to the EU announcement was regrettable, not only because it was antagonistic, but because it was short-sighted. There will not be an "energy war" in the Caspian any time soon, mainly because the EU, Azerbaijan and Turkmenistan should and will likely continue negotiations on a Trans-Caspian gas option irrespective of Russian bullying. Moscow has less and less leverage in the energy realm over all three actors and gone are the days when Russian bluster could alter the course of the winds of change on the Caspian.