EurasiaNet Business & Economics - Caspian Sea: Azerbaijan Differs with Russia on Pipeline Construction

BUSINESS & ECONOMICS

CASPIAN SEA: AZERBAIJAN DIFFERS WITH RUSSIA ON PIPELINE CONSTRUCTION
Rovshan Ismayilov 10/22/07

During the recent Caspian summit in Iran, Russian President Vladimir Putin asserted that any future pipeline projects in the region would need the approval of all five littoral states. Officials in Azerbaijan are disputing the Kremlin on this point.

Khalaf Khalafov, Azerbaijan’s deputy foreign minister, rejected Putin’s attempt to secure veto power for Russia on matters concerning Caspian Basin energy development. Speaking at an October 19 news conference in Baku, Khalafov insisted that pipeline-related matters were, in effect, the internal affairs of the countries undertaking the projects.

Khalafov’s statement has important implications for the envisioned trans-Caspian natural gas pipeline (TCP), which has been mulled in recent months by Azerbaijan, Kazakhstan and Turkmenistan. [For background see the Eurasia Insight archive]. The TCP route, which is strongly backed by the United States and European Union, would circumvent Russia, and thus could significantly weaken the Kremlin’s energy position in Central Asia. [For background see the Eurasia Insight archive].

Azerbaijan’s position is that TCP construction is not tied to efforts to conclude a general treaty on the sea’s legal status, Khalafov said. The pipeline’s route would stretch across areas that are not subject to dispute among the five littoral states -- Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan. "Unsettled Caspian legal status cannot put obstacles [in the way of] projects like the trans-Caspian pipeline," Khalafov said.

During the October 16 Caspian summit in Tehran, the leaders of the littoral states could not find consensus on TCP. [For background see the Eurasia Insight archive]. Khalafov said precedents concerning pipelines along the bottoms of the Black and Baltic seas validated Azerbaijan’s position concerning Caspian-related routes.

Azerbaijan appears to have Kazakhstan’s support in the TCP matter. In Tehran, Kazakhstani president Nursultan Nazarbayev said that in order to move forward, the TCP route needed only the agreement of the states directly involved. Russia, meanwhile, seems to have the backing of Iran on the consensus approach.

Turkmenistan -- which has a border dispute in the Caspian with Azerbaijan, along with an oil field also claimed by Azerbaijan -- has not adopted a clear position on the pipeline issue. New Turkmen leader Gurbanguly Berdymukhamedov has actively sought to expand Turkmenistan’s energy options. At the same time, he has taken care to maintain a strong relationship with Russia, which controls the lion’s share of the country’s current natural gas exports. [For background see the Eurasia Insight archive].

According to Ilham Shaban, a Baku-based energy analyst, Azerbaijan is placing increased emphasis on TCP construction. Khalafov avoided commenting Turkmenistan’s current positions on Caspian-related matters, saying only that Baku and Ashgabat continue to probe ways to resolve their differences. "Work continues and the next meeting between experts will be held in Turkmenistan soon," Khalafov said. "The sides are willing to resolve this issue, and interested in expanding of economic cooperation in the Caspian Sea."

A source in Azerbaijani Foreign Ministry, speaking on condition of anonymity, said that despite an intensified Baku-Ashgabat dialogue since the late 2006 death of former Turkmen leader Saparmurat Niyazov, no substantial progress has been made on the territorial issue, or the matter of possession of the Kapaz gas field, which is called the Serdar field by Turkmen officials.

Editor�s Note: Rovshan Ismayilov is a freelance journalist based in Baku.

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