Category Archives: Energy Diplomacy

The Second Karabakh War and Caspian Energy

Trans-Caspian Pipeline (Photo-Credit: IENE)

Trans-Caspian Pipeline (Photo-Credit: IENE)

On November 10, the second war in Nagorno-Karabakh ended with a Russia-brokered ceasefire agreement signed between Azerbaijan and Armenia. While the 44-day war caused severe damages to frontline settlements and civilian casualties on both sides, frequent missile attacks carried out by Armenia towards Azerbaijani cities and infrastructure beyond the frontline raised concerns not only in Baku but also in the EU regarding the security of vitally important energy infrastructure. The possibility of damages to energy infrastructure, particularly the Baku-Tbilisi-Ceyhan oil pipeline and the Trans-Anatolian Pipeline, would explicitly put the role of these pipelines in European energy security under question.

BACKGROUND: The Tovuz/Tavush incidents on the border between Armenia and Azerbaijan in July 2020 became a prelude to the second war between Baku and Yerevan in the Nagorno-Karabakh region. On September 27, 2020, fighting escalated beyond the established “meeting point” (Line of Contact) with the involvement of a significant number of military personnel, artillery units, and long-range missiles, threatening the geopolitical stability in the Black Sea-Caspian region. Continue reading

Beijing’s Long Road to the Gulf Region (Baku Dialogues; Spring 2021)

Baku Dialogues; Issue: 4. Spring 2021

Baku Dialogues; Issue: 4. Spring 2021

Energy cooperation has been a key aspect of growing bilateral cooper­ation between China and the Arab states of the Gulf region for the past several years. Since 1996, China has become a net importer of crude oil and, as the second‑largest en­ergy consumer in the world after the United States, is now the third‑largest importer of oil after the United States and Japan. Therefore, it should not come as a surprise that China is eying a deep and strategic partnership with the states of a re­gion that sits on top of the world’s largest proven crude oil and natural gas reserves.

The deepening political and economic cooperation between China and the member states of the Gulf Cooperation Council (GCC) has received increasing atten­tion from the region’s more estab­lished strategic players: foremost the United States, but also the UK as well as the EU and some of its member states. Indeed, the region’s apparent geopolitical challenges— such as the American withdrawal from the Middle East, the escalation of sectarian wars in the region, the outbreak and development of the Syrian conflict followed by the spread of Islamic radicalism and similar threats—have encouraged the Arab states in the Gulf (as well as Iran) to look more to the East for new reliable partners. This has pro­vided China with an opportunity to obtain a foothold in the region, which sits adjacent to the Silk Road region and is therefore of signifi­cant and lasting interest to readers of Baku Dialogues. Continue reading

The Growing Influence of the United Arab Emirates in a Complex Central Asian Region

Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi (L) and Nursultan Nazarbayev, President of Kazakhstan (R) in Astana during an official state visit in July 2018 /AFP

Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Nursultan Nazarbayev, President of Kazakhstan in Astana during an official state visit in July 2018 /AFP

With vast energy sources and favorable geography, Central Asia has been subject to intense rivalries between Russia, China, Iran, Turkey, and the Gulf monarchies, among others, for influence.

The energy sector has become the key prize, with natural gas being of greatest importance. Increasingly, gas is a major source of exports for the region. Central Asia accounts for about 4 percent of global energy deposits. The oil reserves in Central Asia and along the Caspian Sea coast amount to 17 to 33 bbl/d, which are comparable to that of Qatar The Gulf monarchies have been particularly active in this area in recent years, signing several memoranda and partnerships in the region. The energy giant UAE heavily invests in energy sector of the Central Asian countries to increase its own footprint in the region, bring additional investments to fragile economies, and help them to move away from the energy-based economy. Also, the UAE’s growing investments in the region give additional leverage to Dubai-based private companies operating in these countries. Continue reading

Ionian-Adriatic Pipeline: A Priority Gas Transit Project for Azerbaijan and the Western Balkans

Publication: Eurasia Daily Monitor Volume: 15 Issue: 119

The Azerbaijani State Oil Company (SOCAR) announced, on July 27, the formation of a new corporate entity that will oversee the future development of the Ionian-Adriatic Pipeline (IAP) project. The proposed pipeline is designed to deliver Azerbaijani natural gas to Europe—namely to the Balkan region. According to Murad Heydarov, the head of the subsidiary SOCAR Balkan, the announced firm will be set up by the end of this year (AzerNews, Trend, July 27). Although, SOCAR is not a stakeholder in the IAP project, it acts as a technical consultant and manages the future design of the pipeline between the Albanian cities of Fier and Vlora. This project will represent the first time that SOCAR will undertake engineering services in the Western Balkans. Continue reading

New Southern Gas Corridor Project Will Intensify the Regional Pipeline Race

Southern Gas Corridor Route

Southern Gas Corridor Route

On May 29, Azerbaijan’s President Ilham Aliyev officially inaugurated the first phase of the long-awaited flagship project Southern Gas Corridor (SGC), through which Caspian natural gas from the Shah-Deniz II field will be transported to Europe. The new project consists of several pipeline networks that pass through Georgia and Turkey (via the Trans-Anatolian Pipeline, TANAP) and further through Greece, Albania and Italy (via the Trans-Adriatic Pipeline, TAP). As Shah Deniz Stage 2 is implemented, gas production will increase from 9 to 25 billion cubic meters (bcm) per year.

BACKGROUND: A decade ago, the European Commission issued its Energy and Solidarity Action Plan, which set a clear target to help Eastern European countries boost and diversify their gas imports. The Southern Gas Corridor project is the backbone of this strategy to decrease Europe’s dependency on gas imports from Russia substantially. This has been a growing concern for policymakers ever since a conflict between Gazprom and the Ukrainian government interrupted supplies in the winter of 2006. Continue reading

Southern Gas Corridor Project Opening New Long-Term Opportunities for Europe

Publication: Eurasia Daily Monitor Volume: 15 Issue: 88

Azerbaijan’s President Ilham Aliyev, on May 29, officially inaugurated the first phase of his country’s long-awaited flagship Southern Gas Corridor (SGC) project, through which Caspian-basin natural gas (from the offshore Shah-Deniz field) will be transported to Europe (Azernews, May 29). The new project consists of several linked pipelines that pass through Azerbaijan and Georgia (via the South Caucasus Pipeline Expansion, or SCPX), Turkey (via the Trans-Anatolian Pipeline, TANAP), and further through Greece, Albania, and into Italy (via the Trans-Adriatic Pipeline, TAP). In the initial operational phase of the SGC, 6 billion cubic meters (bcm) of natural gas will annually be transported via Turkey to Europe, and those volumes will be increased to 10 bcm after 2020. Reportedly, the volumes will be expanded to 31 bcm after 2026, if additional gas compressor stations are constructed. Continue reading