Page 8 - FSUOGMWeek92020

FSUOGM PIPELINES & TRANSPORT FSUOGM
Azerbaijan, Turkey return to plan for gas pipeline to Azeri exclave
AZERBAIJAN
The exclave is divided from the rest of Azerbaijan by the country’s main adversary Armenia.
AZERBAIJAN and Turkey have voiced renewed interest in building a gas pipeline to supply gas to the Azeri exclave of Nakhchivan.
Azeri President Ilham Aliyev and Turkish counterpart Recep Tayyip Erdogan held talks in Baku on February 25. A key topic of discussion was whether Turkey could assist in improving the energy security and trade access of Nakh- chivan, which is separated from the rest of Azer- baijan by Armenia.
Azerbaijan and Armenia are locked in a fro- zen conflict over the disputed Nagorno-Kara- bakh territory and have no diplomatic or economic ties. Nakhchivan must therefore rely on neighbouring Iran and Turkey for all its trade.
Nakhchivan depends heavily on imports and exports supplied across its 179-km shared bor- der with Iran. It also gets all its gas supplies from the Islamic Republic under a swap deal agreed between Baku and Tehran in 2004. Under this 25-year deal, Azerbaijan pumps gas to Iran via the border city of Astara. Iran then sends the equivalent of 85% of these supplies on to Nakh- chivan, keeping the rest as a transit fee. Azeri gas shipments to Iran totalled 395mn cubic metres last year.
Nakhchivan’s overreliance on ties with Iran has been a source of concern for the Azeri government over the years. Relations between Azerbaijan and Iran soured in 2010 over a num- ber of issues, including Baku’s support for US sanctions on Tehran, and Tehran’s funding of an Azeri opposition party. These tensions culmi- nated in Iran threatening to cut trade links with Nakhchivan.
Azerbaijan has also repeatedly sought to revise the terms of the gas swap deal, but to no avail.
Diplomatic ties between the pair have improved significantly since the advent of Has- san Rouhani as Iran’s president in 2013. But the US re-imposing sanctions on Tehran since 2018 has put their economic relationship under strain.
This has led Azerbaijan to look at expanding infrastructure links between Nakhchivan and Turkey, which shares an 8-km border with the exclave.
At a press conference after holding talks, the Azeri and Turkish heads of state announced the signature of a memorandum on construction of a railway between Nakhchivan and the Turkish border city of Kars. The project represents an extension of a railway to Kars all the way from Baku via Georgia.
“This is of particular importance. Because of Armenia’s aggressive policy, Nakhchivan has been living in a blockade, that is, under siege for many years,” Azeri President Ilham Aliyev said. “It is a big problem for Nakhchivan to export its products to foreign markets. Construction of the Kars-Igdir-Nakhchivan railway will elimi- nate this problem and thus improve the welfare and prosperity of the Nakhchivan autonomous republic.”
Erdogan in turn said that the development of a 160-km cross-border gas pipeline was also on the agenda.
“Nakhchivan will have more access to natu- ral gas. In other words, it will get stronger with the support of both Iran and Turkey,” the head of state told the conference.
The pipeline was first mooted in 2010, when relations between Azerbaijan and Iran were beginning to deteriorate. That year Azer- baijan’s national oil company (NOC) SOCAR signed a memorandum on the project with Turkish gas firm Botas. Neither side has dis- closed a schedule for its construction, nor said if any binding agreements have been reached on the venture.
Azerbaijan and Turkey share strong ties, often describing themselves as “brother” Turkic states. Azerbaijan’s SOCAR is also Turkey’s largest sin- gle direct foreign investor, having invested in oil and gas pipelines and refining and petrochemi- cal projects in the country over the years.™
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w w w . N E W S B A S E . c o m Week 09 04•March•2020