Azerbaijan “has not turned down” NABUCCO

Azerbaijani Minister of Industry and Energy Natig Aliyev has dismissed reports claiming the resource-rich South Caucasus republic has turned down the West-backed project on building the NABUCCO pipeline that will pump gas to Europe while by-passing Russia.

Aliyev said many are trying to politicize the issue, taking advantage of rising political tension in the South Caucasus region, but these attempts have not affected talks on the project.

“Azerbaijan has a reliable export route – to Georgia, Turkey and further to European markets,” he told reporters on Tuesday. “This is an extremely lucrative route. No force or country can divert us from this path. NABUCCO is real and it is a project of the future. But it has been so politicized that the [exports of] hydrocarbon reserves involved are under a question mark. Now, they are trying to further exacerbate the matter to do away with the NABUCCO project.”

Russia's Kommersant newspaper reported that Azerbaijan had allegedly turned down the project and Azerbaijani officials announced the decision to US Vice-President Dick Cheney during his visit to Baku last week.

The minister admitted that the future of the project is somewhat questionable, given certain challenges with filling the NABUCCO pipeline.

Aliyev reminded that the pipeline is to pump hydrocarbons produced in Azerbaijan and Central Asia. He emphasized that Azerbaijan cannot supply the full bulk of gas needed for the conduit.

“Actually, gas reserves from Iran, Iraq and Middle East countries were [initially] the primary source for the NABUCCO project, but the political situation there does not allow this,” Aliyev said.

He stressed that Azerbaijan has turned into a gas exporter, however, the country is unable to access European markets with current gas production levels.

“If we are exporting 7-8 billion cubic meters of gas, this is not enough to enter European markets. Therefore, another issue is coming to the fore today, namely, using the reserves in Central Asia.

“However, there are also many questions regarding transportation of these resources via NABUCCO. Therefore, countries seeking realization of the project should solve emerging problems,” the minister said.

Aliyev emphasized that Azerbaijan is not involved in implementing the project proper but has merely pledged to provide its gas for the pipeline.

The minister said further that issues regarding security of the conduit remain open as well. Nonetheless, discussions on realizing project are underway, he added.

The NABUCCO project worth 8 billion aims to help European countries diversify supplies of energy and reduce dependence on Russian gas. It seeks to deliver 30 billion cubic meters of gas from Central Asia and the Caspian region to Europe through a 3,300-kilometer pipeline from Turkey through Romania, Bulgaria and Hungary to Austria. Only Azerbaijan has agreed to transport its gas through NABUCCO so far. The United States and Europe are striving to secure gas supplies from Kazakhstan and Turkmenistan as well.

Transportation of first gas via the pipe is expected in 2013.

Analysts say that Turkey, which is seeking to act as a transit state for the NABUCCO route, is one of the most arduous supporters of the project. Turkish Energy Minister Hilmi Guler said while addressing a two-day Azeri-Turkmen oil and gas conference in Baku on Tuesday that the NABUCCO project was among Ankara’s biggest targets in the energy sector.

“We will be able to realize it. The NABUCCO project is turning into an important part of energy security of not only Turkey but also Europe as a whole, and no one should doubt that. Just like BTC [Baku-Tbilisi-Ceyhan main export pipeline] and Shahdaniz [the project on tapping Azerbaijan’s offshore gas field], this project will materialize. We are taking major steps in this area.”

Azerbaijani First Deputy Prime Minister Yagub Eyyubov said Azerbaijan’s gas reserves amount to 2 billion cubic meters, according to preliminary estimates.

“This means that in the next 100 years, we will be able to both meet domestic demand and export gas to foreign markets,” Eyyubov said.*