European Energy Security and the Southern Caucasus
International conference discusses the geopolitical environment of the Southern Gas Corridor
Azerbaijan as the starting point for European diversification efforts
The past year brought movement on a topic that has been heavily discussed in both Europe and the Caspian region: the Southern Gas Corridor. The European Union has been making an effort over the past few years to diversify its natural gas imports. In addition to North Africa, Norway, and Russia, the Caspian region should also deliver gas to Europe. Given the enormous reserves in this region – which so closely neighbors Europe – this is hardly surprising.
Azerbaijan has played a key role in all of these efforts. Starting in 2019, it will be the first country from the Caspian region to deliver gas to Europe directly without passing through Russia. The project has made clear the geostrategic challenges in the region. In addition to the European Union, both Russia and Turkey are pursuing their interests here. The Nagorno-Karabakh conflict is still unresolved. The potential of connecting to the natural gas fields in the eastern Mediterranean means that the Arab-Israeli conflict is also a factor. The same can be said for Iran as a possible provider for gas; whether the Geneva talks will bring about a fundamental lift of sanctions against Iran, however, is still an open question.
Azerbaijani interests in Europe
Major topics under examination at the conference were the perspectives from Azerbaijan as a production land and Turkey as transit country. Both nations have a strong interest in cooperating with the European Union. An animated discussion took place over the EU's past role in the project. While one side underlined the positive cooperation with Brussels, voices on the other said they had wished for even stronger engagement. There were no doubts over the future of Azerbaijani-European relations. All the experts present stressed Baku’s desire for further cooperation in the energy as well as many other sectors.
Europe’s perspective: “Strategies alone cannot build pipelines”
For their part, the German government and the European Commission reciprocated the Azeri desire for stronger ties. Azerbaijan’s role in development and construction of the Southern Gas Corridor was repeatedly emphasized. These political representatives were optimistic that the natural gas trade with Azerbaijan is the start of a success story for the southern corridor regions. It is hoped that energy trading may lead to further positive developments in calming tensions in certain conflict regions along the corridor.
Experts, however, pointed to uncertain demand in European natural gas markets. At the same time, they highlighted that the success of the project, and specifically the construction of the corridor, would depend on the alignment of political and economic framework conditions. Strategies or politics alone, they argued, will not build pipelines. Only when the “carrot” of economic prospects is offered alongside the “stick” of political requirements will energy companies finally be ready to finance such pipelines. For this reason, a holistic approach is essential to the success of the Southern Gas Corridor.
The conference was hosted by the DGAP with friendly support of BP Europe.