Disagreement between Turkiye and Azerbaijan?
03 December 2022
On November 25, at the International Conference under the motto “Along the Middle Corridor: Geopolitics, Security and Economics” held at ADA University in Baku, President Ilham Aliyev's opinion that an additional agreement on gas transit with Turkiye has not yet been reached has sparked discussions. What is happening, what are the differences between strategic allies connected with?
In his speech, the president said that the existing pipeline system should be expanded to carry out additional gas supplies to Europe. He recalled that less than two years ago the final segment of the Southern Gas Corridor Trans-Adriatic Pipeline was completed. The president stressed that today there is a need to increase the volume twice – from 10 billion to 20 billion cubic meters. "For this, of course, the consolidated position and investment of all shareholders will be needed. Azerbaijan owns only 20 percent of TAP. Therefore, we hope that we will reach this point with our partners. Also, the expansion of TANAP from 16 billion cubic meters to 32 billion cubic meters. Because almost all the capacity of TANAP is involved. Of course, all this will require additional investment. To do this, we, of course, need to have agreements with our Turkish colleagues on transit. Without this, it will not be possible to meet the growing needs of European consumers and Turkish consumers,” the head of state said.
Ilham Aliyev stressed that there is an opportunity to attract the Trans-Balkan pipeline without wasting time: “We are ready. The capacity of this pipeline is 3 billion cubic meters. Thus, we are ready to supply the necessary volumes, possibly within a month. But for this we need to have a transit agreement with Turkiye. Unfortunately, we have not reached that stage yet. Negotiations continue. Negotiations take more time than we expected. We hope that we will reach this agreement. Because if it is not reached due to some reasons then all our plans to supply additional gas to Turkiye and to Europe will be under threat.”
The president hoped that we would be able to fully implement the Memorandum of Understanding signed with the European Commission in July. “But for this we need to finalize our agreements with our Turkish friends. I hope that this will happen soon,” he said.
The head of the Oil Research Center Ilham Shaban explained to Presklub.az the reasons for the problem between Turkiye and Azerbaijan:
“The first agreement between Azerbaijan and Turkiye on the transit of Azerbaijani gas was signed in 2013 on the Shah Deniz-2 project. This agreement included the transfer of specific volumes. In other words, it was an agreement to transfer 6 billion cubic meters of gas to the western part of Turkiye through TANAP, and secondly, to transport 10 billion cubic meters of gas through Turkiye to Europe. Currently, work within the framework of this agreement is successfully continuing. According to the provisions arising from the memorandum signed between Azerbaijan and the European Union on July 18, Azerbaijan should double these volumes. This requires an agreement on the transportation of additional volumes to Europe via Turkiye. At present, negotiations are underway on this agreement. Naturally, in the negotiations, the parties proceed from the framework of their interests. Of course, as usual, we proceed from the principle of “One Nation two states”. But in commercial matters it is replaced by business interests. This is also normal. This is also the case in a family, when the children themselves have a family, then they have their own expenses, interests. I do not consider it correct to give different colors to the discussions between Turkiye and Azerbaijan.”
The expert recalls that in October of this year, Russia unexpectedly proposed to create a gas hub for Turkiye: “the development of events after that shows that Israeli gas will enter the market, as well as gas from the other side of the Caspian Sea. Therefore, the issue is considered from a broader point of view, because there must be agreements for a long-term period. It is possible to talk not only about the gas produced by Azerbaijan, but also about the gas that will be transported under its operator. Naturally, the details are not publicized. The point is that the agreements reached through the joint efforts of Azerbaijan and Turkiye have turned Turkiye, a gas importer, into a transit gas country since 2020. From 2023, Turkiye will also become a gas producer. As the volumes of Russian gas sold to Europe decrease and the export of Azerbaijani products increases, it will be possible to transport 20-25 billion cubic meters of gas through the Southern Gas Corridor through Turkiye. This is a great achievement for Turkiye, including for Azerbaijan, a gas producer. As President Ilham Aliyev said, not only we gain gas, but wherever gas passes, the interests of these countries are also taken into account and profit.”
Turgut
In his speech, the president said that the existing pipeline system should be expanded to carry out additional gas supplies to Europe. He recalled that less than two years ago the final segment of the Southern Gas Corridor Trans-Adriatic Pipeline was completed. The president stressed that today there is a need to increase the volume twice – from 10 billion to 20 billion cubic meters. "For this, of course, the consolidated position and investment of all shareholders will be needed. Azerbaijan owns only 20 percent of TAP. Therefore, we hope that we will reach this point with our partners. Also, the expansion of TANAP from 16 billion cubic meters to 32 billion cubic meters. Because almost all the capacity of TANAP is involved. Of course, all this will require additional investment. To do this, we, of course, need to have agreements with our Turkish colleagues on transit. Without this, it will not be possible to meet the growing needs of European consumers and Turkish consumers,” the head of state said.
Ilham Aliyev stressed that there is an opportunity to attract the Trans-Balkan pipeline without wasting time: “We are ready. The capacity of this pipeline is 3 billion cubic meters. Thus, we are ready to supply the necessary volumes, possibly within a month. But for this we need to have a transit agreement with Turkiye. Unfortunately, we have not reached that stage yet. Negotiations continue. Negotiations take more time than we expected. We hope that we will reach this agreement. Because if it is not reached due to some reasons then all our plans to supply additional gas to Turkiye and to Europe will be under threat.”
The president hoped that we would be able to fully implement the Memorandum of Understanding signed with the European Commission in July. “But for this we need to finalize our agreements with our Turkish friends. I hope that this will happen soon,” he said.
The head of the Oil Research Center Ilham Shaban explained to Presklub.az the reasons for the problem between Turkiye and Azerbaijan:
“The first agreement between Azerbaijan and Turkiye on the transit of Azerbaijani gas was signed in 2013 on the Shah Deniz-2 project. This agreement included the transfer of specific volumes. In other words, it was an agreement to transfer 6 billion cubic meters of gas to the western part of Turkiye through TANAP, and secondly, to transport 10 billion cubic meters of gas through Turkiye to Europe. Currently, work within the framework of this agreement is successfully continuing. According to the provisions arising from the memorandum signed between Azerbaijan and the European Union on July 18, Azerbaijan should double these volumes. This requires an agreement on the transportation of additional volumes to Europe via Turkiye. At present, negotiations are underway on this agreement. Naturally, in the negotiations, the parties proceed from the framework of their interests. Of course, as usual, we proceed from the principle of “One Nation two states”. But in commercial matters it is replaced by business interests. This is also normal. This is also the case in a family, when the children themselves have a family, then they have their own expenses, interests. I do not consider it correct to give different colors to the discussions between Turkiye and Azerbaijan.”
The expert recalls that in October of this year, Russia unexpectedly proposed to create a gas hub for Turkiye: “the development of events after that shows that Israeli gas will enter the market, as well as gas from the other side of the Caspian Sea. Therefore, the issue is considered from a broader point of view, because there must be agreements for a long-term period. It is possible to talk not only about the gas produced by Azerbaijan, but also about the gas that will be transported under its operator. Naturally, the details are not publicized. The point is that the agreements reached through the joint efforts of Azerbaijan and Turkiye have turned Turkiye, a gas importer, into a transit gas country since 2020. From 2023, Turkiye will also become a gas producer. As the volumes of Russian gas sold to Europe decrease and the export of Azerbaijani products increases, it will be possible to transport 20-25 billion cubic meters of gas through the Southern Gas Corridor through Turkiye. This is a great achievement for Turkiye, including for Azerbaijan, a gas producer. As President Ilham Aliyev said, not only we gain gas, but wherever gas passes, the interests of these countries are also taken into account and profit.”
Turgut
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