ANALYSIS - “Energy Silk Road” launched; Ball in European court now

By Ayaz Museyibov

- The writer is a Financial Analyst at the Center for Analysis of Economic Reforms and Communication, based in Baku, Azerbaijan

BAKU (AA) - On Nov. 30, 2019, Ipsala, a small and wonderful town with a surface area of 753 square kilometers and a population of 30,000, located in Turkey’s northwestern Edirne province, hosted a very important historic event for Europe. On this day, the town hosted the opening ceremony of the Trans-Anatolian Natural Gas Pipeline (TANAP), the 1,850-kilometer-long gas pipeline that extends from the northeastern Turkish province of Ardahan onward to Europe. With this historic event, the export of Azerbaijani gas to Turkey and Europe became a reality.

TANAP is the key pillar and the most important part of the 3,500-kilometer-long energy corridor stretching from Azerbaijan to Europe. Once fully launched, the Trans-Adriatic Pipeline (TAP), which will connect with TANAP on the Greek border, will lay the foundation for the first ever direct transport of Azerbaijani natural gas from the Caspian basin to European markets. The $38-billion-worth TANAP project is a logical continuation of the strategic course designed and followed by Azerbaijan and Turkey to contribute to the energy security of the Southern Gas Corridor involving seven European countries.

The European Union is represented by three out of the seven countries in the Southern Gas Corridor. As the main segment of this corridor, TANAP will deliver gas from the Shah Deniz-2 gas condensate field in the Azerbaijani sector of the Caspian Sea to European consumers. TANAP connects to Europe-TAP through the route of Azerbaijan, Georgia, Turkey, and continues onward to involve Bulgaria, Greece, Macedonia, Albania, Serbia and Bosnia and Herzegovina. The first phase of TANAP was launched on June 12 last year in the Turkish city of Eskisehir, laying the foundation of the delivery of the first gas to Turkey.

Just four years ago, when the world commodity exchanges were shocked by the volatility of oil prices, TANAP, founded by the leadership of Azerbaijan and Turkey, reached onward to the European border. As of the present date, the volume of gas transported to Turkey via TANAP has reached 3.3 billion cubic meters. There are plans to increase the transportation capacity of TANAP, first, to 16 billion cubic meters and then to 31 billion cubic meters (socar.az, Nov. 30, 2019) in the coming years. In addition, if the TANAP-TAP start shipping gas to Europe, Europe will be able to have access to the long-awaited Caspian gas and have new opportunities along with it.

In recent years, the increased demand for natural gas as a low-carbon energy source has streamlined the diversification of sources and routes along with contributing the implementation of new projects and development of the gas industry. The weight of these projects is not only limited to the benefits they will bring to the peoples of Turkey, Azerbaijan and other neighboring nations, but also make positive contributions to Europe's energy security. At the opening ceremony of the pipeline, Turkish President Recep Tayyip Erdogan highlighted that “TANAP does not only guarantee Turkey's energy security, but aims to bolster the energy supply security of European countries as well.” (Anadolu Agency, Nov. 30).

No other project before TANAP was successfully implemented to contribute to Europe’s energy security because of technical, financial and political factors, although various projects have been discussed in individual platforms and design works have been carried out. Azerbaijan has opened new horizons toward an enhanced energy security of Europe by offering favorable conditions for these projects. Energy supply to Europe, particularly to South and Southeast Europe, in most cases, depends on only one source. These projects will play an indispensable role for the countries of the region offering access to robust energy sources, as well as contributing to the economic independence of these countries.

TANAP’s realization has never been an easy process. Prior to TANAP, Azerbaijan had to go through a long journey and a very difficult test. It is worth emphasizing that the Baku-Tbilisi-Ceyhan pipeline, known as the “Contract of the Century”, provided Azerbaijan with experience in global project management. Launched in 2006, this pipeline has turned Azerbaijan into one of the best alternatives and a platform for cooperation in the delivery of Caspian (Azerbaijan, Kazakhstan, Turkmenistan and Russia) energy resources to Europe.

The Baku-Tbilisi-Erzurum gas pipeline, launched in 2007, was the next giant project for Azerbaijan and Turkey to connect European and Asian energy channels. In the international forum “One Belt, One Road” held in Beijing, President of Azerbaijan Ilham Aliyev, referring to implementation goals and Azerbaijan’s role in the project, said, “Azerbaijan has vast oil and gas reserves. We build multiple pipelines to transport our oil and gas to international markets and our main target is to diversify economy, to invest in human capital and to create sustainable opportunities for growth” (president.az, April 26).

It is an indisputable fact that the world’s energy map has changed a lot with these successful projects and new cooperation models have emerged with new players, such as Azerbaijan, acting as initiators and key implementers of new projects. It has once again been seen that strong integrated links among producing, transit and consuming countries are important to achieve energy security. Cooperation models, proven over time between Azerbaijan and Turkey, have been a decisive factor here. Azerbaijan’s success in realization of these projects, achieved by transforming regional contentions into cooperation platforms and involving all stakeholders, in fact, played an exemplary role for other countries. These diversified giant energy corridors are also strategically important as they connect the East and the West and have important economic implications. These projects will also strengthen legal, economic, cultural ties and mutual understanding among the countries involved, introducing new platforms for regional cooperation and security. As underlined by President Aliyev: “This project will create bridges between countries and pave the way for even greater mutual understanding.” (president.az, Nov. 30).

This cooperation format could also be introduced to address the tensions faced in the distribution of the new hydrocarbon resources in the eastern Mediterranean in order to create new opportunities for European energy security and bring peace and stability to the region.

In conclusion, these projects and the benefits they bring to the region create new economic formations that will be in everyone’s favor. Such economic formations could serve as an incentive to achieve technological innovations and maximize economic gains in the countries of the South Caucasus, which will provide safer and cheaper energy sources for European countries. It is therefore expected that European countries will mobilize all their efforts for the TAP to become a reality very soon.

* Opinions expressed in this article are the author’s own and do not necessarily reflect the editorial policy of Anadolu Agency.