!à‡`="justify">17 November in Ipsala in Turkey was held inauguration gas pipeline connecting the gas networks of Turkey and Greece. The inauguration was attended by President of Azerbaijan Ilham Aliyev, Prime Ministers of Turkey and Greece Tayyib Erdogan and Costas Karamanlis, as well as ministers of energy of Georgia and the United States. After realization of construction of this pipeline, it has been made possible to export of Azerbaijani gas from the Shahdeniz deposit in the Caspian sea to the member state of the European Union, to Greece. By 2012, also planned to complete the construction of the pipeline between Greece and Italy and then natural gas from Azerbaijan will also pumped to Italy. The significance of this pipeline is that it allows supply gas European consumers by alternative to Russia route. In particular, at the end of 2006, thanks to the introduction into service of Shahdeniz gas deposit, Azerbaijan managed to completely abandon the import of Russian gas, amounting to a yearly average of 5 billion cubic meters. Azerbaijan has had to make the move shortly after Russia increased gas prices nearly doubled, demanding for a thousand cubic meters of gas 235 dollars. Payment of such a high price for gas has been also unable Azerbaijan neighbor Georgia. However, the introduction of operational Baku-Tbilisi-Erzurum enabled the country to purchase natural gas at a price of 140 dollars per thousand cubic meters of gas from Azerbaijan, which has facilitated the already difficult situation of the Georgian economy.

Azerbaijani gas plays an important role, both for Turkey and the EU countries, which have the possibility of access to a supplementary source of this resource. Apart from the pipeline to Greece and Italy, the Azerbaijani gas and gas from the Caspian Sea basin are scheduled exported to the countries of Eastern Europe through the planned pipeline Nabucco. Azerbaijan has already agreed to participate in this project and even considered a possible equity participation Azerbaijani State Oil Company in the construction of the pipeline. In this case Azerbaijan is not particularly receives the risk options for the export of natural gas to its European markets. In addition, several days ago, the operator for the exploitation of Shahdeniz BP, announced the discovery of new deposits of natural gas in this field. Today anticipated that the field is up to 1.2 trillion cubic meters of gas. However, as shown by the recent discoveries this figure could grow even more.

Officials from the United States and the EU also lobbying Turkmenistan and Kazakhstan to join the project Nabucco. Already President of Turkmenistan Berdymuhamedov to the prior consent to the possibility of his country's accession to the project. However, this requires the construction of the Trans Caspian gas pipeline. The main obstacle is its implementation lies in the issue of the status of the Caspian Sea. Meanwhile, governmental commission of Azerbaijan and Turkmenistan started again negotiations on the definition of affiliation Kapaz-Sardar oil field, which is the main focus of the dispute between the two countries. In the case of solution to this problem appears hoped that the two countries will also consider the question of the division of the Caspian Sea between the two countries.

Even in the case of non-participation of Turkmenistan after realization the Nabucco project, Azerbaijan, without economic and political risk will have the opportunity to use both the pipeline, Nabucco and those which opened between Turkey and Greece and will have a possibility to maneuver with different situations. Exit through these pipes to different countries, will contribute to a more elastic approach to possible problems with a country's economic or political nature.

rovsen@azerimail.net

This commentary is from USAK's Energy Review Newsletter