POLITICAL INDECISION

Despite Europe's obvious interest in alternative sources of gas, there is not political support today from every country of the EU for projects linked with gas supplies from the Caspian region. This is the main reason for the halt in the process of creating a Southern Gas Corridor in a full-fledged format, and Baku has already made no bones about this, also pointing to possible risks from a delay in implementing the projects.

And so, at a meeting with members of the Energy Security Committee of the "Euronest" Parliamentary Assembly, Azerbai-jan's deputy speaker Valeh Alaskarov said that the "cost of the Nabucco project was originally estimated at 7.5 - 8bn euros. At the same time, European politicians state that if Azerbaijan cannot guarantee a flow of 30bn cu m of gas annually through it, then the project will not be effective. But this is not quite the case. For example, investments in developing Stage II of the Shah Deniz [Sahdaniz] project have been estimated at $40-45bn (for the creation of the Southern Gas Corridor). So if the Nabucco project was so important for the EU they could have found the money to finance it". He said that the European Countries are currently investing considerable sums into improving the banking system and supporting the economies of troubled states, and therefore finding 8bn euros for the Nabucco project should not be a problem for them. The Azerbaijani deputy believes that the EU "sees gas as an ordinary commercial product, but this is the wrong approach", bearing in mind that, according to experts, the emergence of new sources of gas supplies will lead to a reduction in prices for it of 10%, and in this instance European consumers will be saving at least 60bn euros a year.

It should be pointed out that a consortium for the development of Shah Deniz is currently looking at an option for the transportation of its gas to Europe - the Nabucco West and TransAdriatic (TAP) pipelines. Earlier, BP's vice-president for the development of the Shah Deniz-2 field, Al Cook, said that both projects must present their final proposals before 1 April and the final choice between them will be made in June 2013.

Meanwhile, representatives of the TAP project are confident they will be able to present convincing arguments to the consortium on the development of the Azerbaijani Shah Deniz gas-condensate field to their advantage in March and that the project will be selected as the preferred and final option for the transportation of Azerbaijani gas to Europe. In an article published on TAP's official website, the managing director of the project, Kjetil Tungland, writes that on 31 March 2013 TAP will present its final package of proposals entitled "Decision Support Package" to the Shah Deniz consortium. Tungland believes that the TAP is currently the biggest and most strategically important of the two proposed pipelines through which gas from the Azerbaijani field will reach European markets. It will be recalled that TAP has been asked to transport gas from the Caspian region via Greece, Albania and the Adriatic to southern Italy and beyond to Western Europe. On 13 February these countries signed an inter-governmental agreement on the project in Athens.

Meanwhile, according to Elsad Nasirov, the vice-president of SOCAR (Azerbaijani State Oil Company), Azerbaijan is today a participant in both projects - Nabucco West and TAP - and is due to pay by way of a contribution a sum of $40-45m. "Today Azerbai-jan's tax payers may ask themselves the question: 'Why is money being put into both projects when only one will be chosen?' In today's conditions, when competition has increased considerably, we have no right to make a mistake. It is better to risk $40-45m now to find out which of the projects is worse than lose more in the future," Nasirov said, adding that the choice of route will be based exclusively on commercial principles. He also said that direct gas supplies from Shah Deniz to Europe will commence in 2019.

As regards the construction of the Trans-Caspian pipeline, which Azerbaijan is primarily interested in, its implementation will be possible as soon as Turkmenistan and its EU partners agree on sales, Nasirov said. "Our Caspian fleet has the opportunity of completing construction of about 100km of pipeline across the Caspian in about a year," he said. SOCAR's vice-president added that when all three segments, i.e. the Trans-Anatolian gas pipeline and the gas transport route to Europe are ready and all companies can reach an agreement with Turkmenistan, within a year to 18 months the participants in the projects will be able to increase the throughput capacity of all three sections. "When this is done Azerbaijan will become not only a gas supplier, but also a transit country. This will be a very large-scale project for the EU," Nasirov noted.

It will be recalled that the 300-km long Trans-Caspian gas pipeline is due to be laid from the Turkmen shore of the Caspian to the Azerbaijani coast. Earlier, Azerbai-jani Minister for Industry and Power Engineering Natiq Aliyev said that as part of the project for the Trans-Caspian gas pipeline preparations are being completed of two documents which are due to be signed at the level of the heads of Azerbaijan, Turkmenistan and the European Commission, and between the governments of the two Caspian countries. The first document, which is due to be signed by the heads of Azerbaijan, Turkmenistan and the President of he European Commission Jose Manuel Barroso, will mark the support for this corridor by the three parties.

As we can see, there are already enough intrigues around the Azerbaijani gas supplies to Europe. Bearing in mind the tense political situation in the Caspian region, especially along the coast of Iran, it is becoming even more acute. However, Iran is one of seven shareholders in the Shah Deniz consortium with a 10% stake, and this, let's be clear, is very irritating to the western partners which at times present it as the cornerstone of all the unsolved problems over Azerbaijani gas supplies. In this connection, at a meeting with members of the Energy Security Committee of the "Euronest" Parliamentary Assembly, Nasirov tied to explain to the Europeans in layman's terms what "non-friendship with Iran" could lead to. "It's not hard to imagine what would happen if tomorrow or the day after the US or Israel strikes against Iran. Naturally, Iran's missiles cannot strike long-distance targets, including the US, and, bearing in mind Israel's strong ABM defence, they will not be targeted against that country, either. Iran cannot strike against Turkey, Russia or Georgia either, and it will not wish to strike against Armenia. You can imagine what country could be Iran's target in this event - a partner-state of the USA, Israel and Europe in questions of energy security. Therefore it would be wrong to treat seriously Iran's participation in the consortium and to offer it alternative options," Nasirov said.