A SEA WITH ACCESS TO THE WORLD

The Caspian region more or less affects the lives of 1.9 billion people, which accounts for one-fourth of the world population. The cumulative GDP of the countries located in the Caspian and adjacent regions exceeds 20 trillion dollars, which equals 25 per cent of the world GDP. 

These interesting facts were cited during the third Caspian forum held in Istanbul last week. According to Turkish Minister of Customs and Trade Hayati Yazici, 12 per cent of oil reserves and 4 per cent of natural gas reserves are concentrated in the countries of the Caspian region. Thus, this region, which is also located at the major transport corridors, is one of the tremendously important economic areas of the world and is very attractive for investment.

Conflicts to the detriment of business 

The forum, which was organised by the Caspian Strategy Institute (HASEN), brought together high-ranking government officials, representatives of companies and leading experts from more than 30 world countries. Messages communicating greetings were sent to the participants by the presidents of Azerbaijan and Turkey. Notably, Azerbaijani President Ilham Aliyev stressed in his message that the Caspian region, which links the East and West, has turned since the end of the last century into one of the significant geo-strategic centres of the world.

"I believe that these important events attended by the official representatives of governments, politics, men of science, civil society and business representatives, can make a significant contribution to the cause of deepening cooperation between the countries of the region, growth of mutual investment, revitalisation of the historic Silk Road, and realisation of new large-scale transnational projects capable of changing the energy map of Europe," President Ilham Aliyev said.

Turkish President Abdullah Gul, for his part, stated that "Turkey strongly supports steps towards identifying the true potential of the Caspian region. To do this, there is a need for the most productive use of existing mechanisms for cooperation. It is necessary to develop a large-scale model of partnership, based on mutual benefit." 

President Gul drew attention to the need for a peaceful settlement to the "frozen" conflicts in the region.

"Continuing the cooperation of all international forces to ensure peace is one of the main tasks for us," the Turkish President's message says.

Azerbaijani Transport Minister Ziya Mammadov's remarks are noteworthy in this regard. The minister said in his address that the Armenian-Azerbaijani Nagornyy Karabakh conflict is impeding the projects in the whole region and is having a negative impact on their security. According to him, a peaceful solution to conflicts is important in terms of improving the business climate in the world, growing trade and diminishing risks.

Regional projects in the Caspian Sea are developing rapidly, and the countries not involved in these major undertakings due to their own poorly disguised political views can already see the bitter consequences of their defeat.

But Azerbaijan, due to its favourable geographic location and loyal relationship with most of its neighbours, is already receiving real profit from the projects and, moreover, it is acting as the one initiating new ones.

Energy network 

According to Turkish Minister of Energy and Natural Resources Taner Yildiz, Azerbaijan and Turkey should boost their cooperation in the energy sector, because amid the growing demand for natural resources in Europe the significance of this partnership will only increase.

"As the Trans-Anatolian Pipeline (TANAP) and Trans Adriatic Pipeline (TAP) projects are being carried out, a very important system is being established for the delivery of natural gas from the Caspian basin to Europe," Yildiz said.

According to expert estimates, the global demand for energy resources will have increased by 60 per cent by 2030, while in Europe it will grow by 45 per cent over the next 20 years. In addition, the current annual consumption of natural gas in Europe is 500-520bn cubic metres, and the consumption level is expected to reach 700bn cubic metres by 2030, which boosts the importance of the Southern Gas Corridor, in which Turkmenistan, Iran and Iraq are also involved. The consumption of gas in Turkey will also increase in the coming years, reaching 50-52bn cubic metres. 

"83 per cent of Turkey's population have access to gas today, and by 2015 the whole country will be supplied with gas," Yildiz said.

In the meantime, Head of the State Oil Company of Azerbaijan Republic (SOCAR) Rovnaq Abdullayev said that the first gas extracted in the second phase of the Sah Daniz [Shah Deniz] field will be delivered to Turkey in 2018 and will reach Europe in 2019. However, the company's plans are not limited to the opening of the Southern Gas Corridor and transporting Shah Deniz-2 gas through the route.

"We see the transportation of Shah Deniz gas just as the first link in this chain," Rovnaq Abdullayev said.

According to SOCAR President, the Shah Deniz Consortium is currently working together with the European Commission on alternative options for gas supplies to Bulgaria. 

"One can say with confidence that the gross export potential of Azerbaijan will be brought to at least 40-50bn cubic metres of gas by 2025. We believe that the greater part of this gas can be transported to European markets," Abdullayev said. 

He went to say that the total cost of the project on delivering Azerbaijani gas to Europe will amount to 45bn dollars.

As part of the forum, Executive Director of the State Oil Fund of the Republic of Azerbaijan (SOFAZ), Sahmar Movsumov, said the Fund was preparing to start financing Azerbaijan's participating share in TANAP. It will make investments worth 800m manats in the project to construct the pipeline. The total investment in the project will amount to 8-10bn dollars. 

SOCAR's partners in the project to develop the Shah Deniz gas-condensate field have already announced their plans to purchase TANAP shares. According to preliminary data, the partners plan to distribute 29 per cent of the participating interest in TANAP as follows: Statoil and BP will get 12 per cent each, and Total - 5 per cent.

According to Kenan Yavuz, the head of SOCAR Turkey Enerji and a member of the board at Petkim Petrochemical Holding, a possible increase in the pipeline capacity is also important as it could be used by other producers in the future. 

"Competition is out of the question here, because it is a big market and the demand for gas is high," he said.

Transport corridor  

Thus, the energy projects implemented in the region are gradually shifting to transit-transport ones, with the involvement of not only Caspian littoral states. So, it became known at the forum that the first pilot train will be launched as part of opening the Baku-Tbilisi-Kars railway link in late 2014. According to Azerbaijani Transport Minister Ziya Mammadov, following the launch of the Marmaray project, commissioning of the Baku-Tbilisi-Kars railway will provide for creating a direct transportation link between Europe and Asia.

The minister noted that at the same time, the construction of a new International sea trading port is underway in Azerbaijan, namely, in the Alat settlement, and a large logistical centre is planned to be built on its territory. 

"As the first stage of the works complete, the transportation capacity will go up to 10m tonnes of cargo and 50,000 containers of a large bulk annually. In the following stages the capacity will increase up to 25m tonnes of dry cargo and 1m containers," Mammadov noted.

Meanwhile, chairman of Azerbaijan State Caspian Shipping Company CJSC Rauf Valiyev, believes that cargo shipping through the Caspian Sea is constantly increasing. Thus the volume of shipping was 1.4m tonnes in 1996 but it reached over 10.3m tonnes last year.

"Close cooperation between our company and our partners in foreign countries involved in these projects is very important in order to boost the commercial opportunities of regional projects and to increase the transit potential of the region. Establishing a dialogue between the companies, coordinating steps, making joint efforts on tariffs, customs procedures to eliminate bureaucratic barriers is a key to carry out such projects. The effective use of the potential of the Eurasian Transport Corridor is one of the main directions of the company's strategy," Valiyev said.

Thus, the launch of the Marmaray tunnel, the construction of the Akhalkalaki-Kars railway line, and successful cooperation between Kazakhstan, Azerbaijan and Georgia are all increasing the potential of the Trans-Caspian transport corridor, which allow one to deliver cargo from the Chinese market to Europe. Along the development of the transport and transit infrastructure in the region, it will again become the centre of trade relations between the East and West.

According to the final declaration adopted at the third Caspian forum, the Asian Development Bank (ADB) estimates that the operations of the Caspian transit corridor will facilitate the GDP  growth in the region by at least 16-17 per cent. As mentioned above, along with transport, energy is a great tool for economic independence that links countries and provides for the prosperity of the region. 

"The Caspian forum considers the Southern Gas Corridor to be a basis for this new concept. The capacity of the 'corridor' allows it to become the main channel for the transportation of not only the Caspian's energy resources but also gas from the deposits in the Eastern Mediterranean, Turkmenistan and northern Iraq," the final declaration says.

Thus, the forum fairly considers transport and energy as the two main pillars for a new destination of the Caspian region, which are capable of further increasing the degree of its significance in the world economy. 

PRESIDENT OF AZERBAIJAN HONOURED WITH THE "STATESMAN OF THE YEAR IN THE CASPIAN REGION" AWARD 

A ceremony to honour a number awards took place at the Caspian forum.

 Azerbaijani President Ilham Aliyev was honoured with the "Statesman of the Year in the Caspian region" award.  

The Baku-Tbilisi-Kars railway project was selected as the "Project of the Year" in the Caspian region. 

Turkish historian Kemal Karpat was named the "Scholar of the Year", while a chess player Saxriyar Mammadyarov (Azerbaijan) was recognised as the "Sportsman of the Year"; Murat Etkin as the "Journalist of the Year", Oguz Haksever as the "TV presenter of the Year", and Tunzala Agayeva (Azerbaijan) as the "Person of arts of the Year".