CHALLENGING EUROPE

Armenia is trying by all means to damage not only the economy of Azerbaijan, but also the energy security of Europe. Yerevan is not only threatening with air strikes, but is making attempts to strike the projects that play an important role in diversifying energy supplies to European countries.

During his telephone conversation with the President of the European Council, Charles Michel, the Turkish President Recep Tayyip Erdogan also underlined this fact. He noted that Armenia, which occupied the territory of Azerbaijan, first attacked the Tovuz region of Azerbaijan located along the oil and gas lines and transport communications, and then the Azerbaijani city of Ganja, created a threat to the security of energy supplies to Europe. Mr. Erdogan called on the EU to demonstrate a consistent position on the territorial integrity of Azerbaijan.

Threats to Europe's energy security

Baku is waiting for a reaction from the leading international energy organizations. Azerbaijani Energy Minister Parviz Shahbazov sent appeals to OPEC, the Forum of Gas Exporting Countries, the International Energy Charter, the International Energy Agency, the World Petroleum Council, the World Energy Council and the International Gas Union condemning Armenia's aggressive policy and attacks on Azerbaijan's oil and electricity infrastructure. The Secretary General of the International Energy Charter, Urban Rusnak, has been the only one so far to make a statement entitled the Energy Security in the South Caucasus.

“In his statement, Secretary General Rusnak called for compliance with international commitments, refraining from any action that could affect important energy infrastructure or significantly disrupt and stop energy supply,” said adviser to the minister, spokesman for the Ministry of Energy Zamina Aliyeva.

She also noted that the escalation of the Armenian-Azerbaijani conflict did not affect the operations of the fuel and energy complex of Azerbaijan. The production and export of hydrocarbon resources to world markets continues as usual, despite the hostilities and missile and artillery strikes in the immediate vicinity of the Baku-Tbilisi-Ceyhan and Baku-Supsa oil pipelines and the South Caucasus Pipeline (SCP).

“The production and export of oil and gas from Azerbaijan are carried out as usual. There are no changes in this regard. The protection of oil and gas pipelines is carried out at a high level in accordance with the safety rules of strategically important facilities,” Zamina Aliyeva said.

The Armenian threat to the main oil and gas pipelines of Azerbaijan was discussed even during the clashes this summer, when hostilities took place not along the contact line in Nagorno-Karabakh, but on the Armenian-Azerbaijani border in the immediate vicinity of the pipelines.

“Even in previous statements by the Armenian leadership, it was indicated that they intend to hit our strategic energy infrastructure, including the pipelines and the Sangachal oil and gas terminal, one of the largest such terminals in the world,” President Ilham Aliyev said.

Western experts, however, expressed full confidence that Armenia would not dare to hit the Azerbaijan’s export pipelines. Otherwise, due to their destruction and serious environmental consequences, Yerevan will bear all the responsibility for its actions.

However, the fears of the Azerbaijani authorities were not ungrounded. On October 4, Armenia launched missile strikes on the city of Mingachevir, which is the host of the largest thermal power plant – the largest in the South Caucasus. This facility provides the lion's share of all power generation in Azerbaijan. A new missile strike on Mingachevir and its power facilities was launched on the evening of October 10, after an agreement was reached between Azerbaijan and Armenia on a humanitarian ceasefire for the exchange of bodies.

On October 6, the Armenian Armed Forces, using the Smerch 9M525 multiple launch rocket system with high lethality rate and containing 300 9N235 rounds, shelled the Aran village of the Yevlakh district of Azerbaijan at demilitarized zones not involved in combat and located at least 50 km away from the battle zone. As a result of the neutralization of these missiles by the Azerbaijani Armed Forces, a few of the shells contained in the rocket fell in the vicinity of the extended section of the South Caucasus Pipeline route, the other - 120 m from the Baku-Supsa oil pipeline, and the rest - 100 m from the Baku- Tbilisi-Ceyhan pipeline.

President Ilham Aliyev described Yerevan's actions as an attempt to undermine Azerbaijan's economic potential. “Despite many power stations built in recent years in Azerbaijan, the power station in Mingachevir is the largest, providing electricity to a significant part of the country. If it is destroyed, we can certainly problems in power supply. Today Azerbaijan exports crude oil, natural gas and electricity. These actions were aimed at our economic potential and once again showed the whole world the criminal essence of Armenia, the Armenian regime,” Ilham Aliyev said.

Protecting critical pipelines

It is no secret that Azerbaijan exports most of the oil produced via the Baku-Tbilisi-Ceyhan pipeline. The end point of the BTC is an oil terminal on the Mediterranean coast near the Turkish city of Ceyhan. This pipeline exports Azerbaijani oil from the Azeri-Chirag-Guneshli block of fields, condensate from the Shah Deniz field, as well as transit Turkmen, Kazakh and Russian oil. Therefore, the scale of the damage is not hard to imagine: an environmental disaster due to the spill of oil and condensate, disruption of Azerbaijani oil exports to world markets and contractual obligations for the transit of oil from third parties.

Meanwhile, further from Ceyhan, Azerbaijani oil is supplied to several European countries, including Italy, Germany, Austria, Spain, Portugal, Croatia, etc. It is obvious how wide the geography of accident will be if any minor damage along the entire chain of oil production and transportation takes place. In the event of the destruction of the BTC or Baku-Supsa oil pipelines, Azerbaijan can organize the export of its oil through the territory of Russia along the northern Baku-Novorossiysk pipeline. However, this will significantly reduce both export volumes and, accordingly, Azerbaijan's foreign exchange earnings, since the throughput capacity of the pipeline is only 5 million tons annually.

In terms of gas supplies, everything is much more complicated. Apart from SCP, there is no alternative for exporting gas from Azerbaijan to Turkey, and then to Europe. Therefore, in the event of damage to the South Caucasus Pipeline, gas supplies from the Shah Deniz field would cease completely.

Remarkably, on October 12, it was reported that the construction of the Trans-Adriatic Gas Pipeline (TAP), which is supposed to ensure the transportation of natural gas to Europe was completed. The pipeline is filled with natural gas from the Turkish-Greek border to a receiving terminal in southern Italy.

The TAP connection point to the Snam Rete Gas natural gas transmission system in Puglia, Italy is expected to be completed and ready to kick off twenty-five years of natural gas supplies from Azerbaijan to consumers in Italy, Greece and Bulgaria, as planned by the end of 2020.

At the initial stage, it is planned to supply 10 billion cubic meters of gas produced within the Shah Deniz-2 project to Europe via the TAP pipeline, which is part of the SGP project. “Together with SOCAR, we are proud to be the shareholders of all transport components of the Southern Gas Corridor value chain with a length of almost 3,500 km, which allows the Republic of Azerbaijan to further contribute to strengthening the energy security of Georgia, Turkey and European countries by providing an alternative energy source through a completely a new gas transmission system,” BP said in a statement.

Non-stop production

In the meantime, all works on the extraction, exploration and transportation of oil to the international oil and natural gas markets in Azerbaijan is carried out in accordance with the previously approved schedule. Of course, the escalation of hostilities could not but cause concern among Azerbaijan's foreign partners in oil and gas projects, but this did not particularly affect their activities in the country, except that security measures were strengthened, which is quite natural under martial law.

“We are very concerned about the expansion of military operations of the Armenian Armed Forces aimed at civilian settlements and infrastructure on the territory of Azerbaijan. In particular, we were very concerned about reports of a missile attack prevented yesterday by the Azerbaijani Air Force on the Baku-Tbilisi-Ceyhan and SCP pipelines, ” Tamam Bayatli, head of the BP-Azerbaijan press service said.

The government of Azerbaijan is the guarantor of the security of all facilities operated by BP in Azerbaijan.

“Nevertheless, we are working in close contact with the relevant bodies to ensure additional security for our own employees, operations and all facilities for which we act as operators in Azerbaijan,” T. Bayatli said.

At the same time, the company hopes that the Armenian-Azerbaijani conflict will soon find its fair solution within the territorial integrity of Azerbaijan and its internationally recognized borders.

SOCAR and its subdivisions continue to operate normally. “We are all right, all operations are going according to plan. Nothing has changed in our activities. All SOCAR enterprises operate as usual,” Ibrahim Ahmedov, deputy head of the SOCAR Event Management and Public Relations department said.

The work of the Mingachevir power facilities continues in the normal mode. “The attacks by the Armenian armed forces on the power plant in Mingachevir, while ignoring the humanitarian ceasefire agreement, are yet another crime against energy and environmental security in the region. A possible regional catastrophe was averted by neutralizing the missiles by our army's air defense forces. Azerbaijani thermal power stations and the Mingachevir TPP, are currently operating as usual,” the Ministry of Energy reported.

In addition to human casualties, the ongoing missile strikes and shelling of the densely populated areas of Azerbaijan by the Armenian Armed Forces entail serious destruction of civilian infrastructure, damage to the electricity distribution network (power lines, transformers), as well as gas pipelines and equipment that provide the population with natural gas.

“With the exception of the war zone, most of these infrastructures are restored immediately. Construction and repair teams operate in the field. The situation is under complete control, and all the possibilities are aimed at ensuring normal gas and energy supply activities as soon as possible,” Z. Aliyeva noted.

Non-random attacks

Meanwhile, the former American co-chair of the OSCE Minsk Group, ex-US ambassador to Azerbaijan, senior fellow at the Atlantic Council, Matthew Bryza, said that Armenia's missile strikes on Azerbaijan's export pipelines could only have a short-term effect, since the destroyed sections could be quickly repaired.

“Most likely, Armenia seeks by such provocations to occupy new territories of Azerbaijan, which host the export pipelines, to gain control over them,” Bryza said.

This assumption is also confirmed by the statement of President I. Aliyev that during the July provocation, Armenia tried to penetrate into the Tovuz region of Azerbaijan and gain control of the SCP.

“In fact, one of the reasons for the Tovuz events was precisely the occupation of new Azerbaijani lands, and then strengthening their positions at the negotiating table. At the same time, the plan was either approach our strategic energy communications, or take them under control and dictate their conditions. This is always included in the plans of the Armenian state. They do not hide this,” I. Aliyev said.

SOCAR believes that Armenia's new provocation against Azerbaijan is not accidental and is aimed at disrupting plans for the supply of Azerbaijani gas to Europe.

“It is no coincidence that attacks from the Armenian Armed Forces became more frequent just a few months before the completion of the Southern Gas Corridor project, when the level of progress on the construction of the last segment, the TAP gas pipeline, was about 98%. Today we are on the verge of a historic moment when natural gas from the Caspian basin will for the first time enter Europe via the Southern Gas Corridor, which will help Europe and Turkey to diversify their sources of gas imports. This will become an important contribution to economic development, peace and stability in these regions,” the representative of the company I. Ahmedov said.

At the same time, SOCAR considers the complete de-occupation of Karabakh to be the only way to ensure peace and security in the region.

“The more frequent attacks from Armenia in recent months have shown that the occupation of a part of Azerbaijan’s territory is also a source of constant threat to the energy security of Europe. The implementation of the binding norms of international law - the de-occupation of Azerbaijani territories - is the only effective way to eliminate this threat, to ensure a safe energy supply to Europe and peace in the region,” Ahmedov said.

By the way, the government of Azerbaijan is confident that the hostilities in Nagorno-Karabakh will not affect Azerbaijan's fulfillment of its obligations in the oil sector, which has been strictly fulfilled for over a quarter of a century.

Amid clear and open threats to the security of pipelines originating from Azerbaijan with the final destination of delivery to Europe, Azerbaijan's partners also fully trust our country's ability to ensure the protection of these projects.

The oil and gas industry has always played a leading role in the development and prosperity of Azerbaijan. The funds received from the sale of oil and gas were and are directed to the development of the national economy. Now the role of the sector has increased even more, since all efforts are mobilized to achieve the main goal - Victory. In addition to ensuring military needs for fuel, one should not forget that with the return of Karabakh, a lot of financial resources will be required to restore the regions and cities of Azerbaijan destroyed by enemy artillery, which means that the Azerbaijani economy needs to be fully armed.