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Azerbaijan questions Turkey's Nabucco moves

BAKU - Hürriyet Daily News | 7/19/2011 12:00:00 AM | İPEK YEZDANİ - [email protected]

Azerbaijan has questioned Turkey’s attitude to the Nabucco pipeline project after Baku failed to receive a copy of the signed contract from Ankara, according to a top official from the Caspian nation.

Azerbaijan has questioned Turkey’s attitude on the Nabucco pipeline project after Baku failed to receive a copy of the signed contract from Ankara, according to a top official from the Caspian nation.

 “Unfortunately nobody sent us the copy of this Project Support Agreement,” Elshad Nasirov, the vice president of the State Oil Company of Azerbaijan, or SOCAR, told the Hürriyet Daily News during a recent interview. “And we will not ask for it, because this will violate the principle of equal treatment for … three projects – Nabucco, the Trans Adriatic Pipeline [TAP] and the Interconnection Turkey-Greece-Italy [ITGI].”

Azerbaijan was the only project partner absent when the legal framework for the Nabucco Pipeline was reportedly signed and finalized on June 8 for the project support agreements, or PSAs, between Nabucco Gas Pipeline International GmbH and the responsible ministries of the five transit countries, Austria, Bulgaria, Hungary, Romania and Turkey.

The signature ceremony was organized just before Turkey’s June 12 general elections in the Central Anatolian province of Kayseri, where Turkish energy minister was running for a seat in Parliament.

The agreements were described by the Nabucco consortium as the affirmation of an advantageous regulatory transit regime under European and Turkish laws, protection against any discriminatory changes in said laws and support for legislative and administrative actions for the implementation of the project.

Nasirov also said an obligatory bilateral transit agreement between Azerbaijan and Turkey to make the project a reality had not been signed yet either, he said.

“We were very close to signing this agreement in April and May. But some minor and some important things prevented two parties to agree and finalize it,” said Nasirov.

 “As we understand, this agreement supports the further implementation and development of the Nabucco concept. But I would like to ask you, does this signature of the project support agreement mean the decision of the Turkish Republic was made to start the transit of gas from Azerbaijan? And if it does, why don’t we sign the bilateral transit agreement in order to enable the two other projects? If we have not yet signed the transit agreement, should we understand that Nabucco has still not been sanctioned by Turkey?” asked Nasirov.

For the ITGI and TAP, Nasirov said that in order to transfer gas through Turkish territory, there needs to be a transit agreement between Turkey and Azerbaijan. “So these projects also cannot be implemented without a transit agreement.”

Little time left to find Nabucco investors

Nasirov said there were also investment problems for Nabucco. “Azerbaijan has sent messages to European countries many times asking for an offer to invest. But we haven’t heard anything from Europe yet,” said Nasirov.

Nasirov drew attention to the fact that there were still plenty of legal and commercial issues to be agreed on as part of the Nabucco project.

“We have very limited time for these issues, we only have two and a half months left now,” Nasirov said.

Second project: Şahdeniz II Project

Nasirov said another Azerbaijani energy project, Şahdeniz, was huge, sophisticated and very expensive.

“The shareholders have to invest 20 billion to 22 billion dollars just to start the production. Therefore, in order to find out how commercially feasible the Şahdeniz project is, we have to very carefully calculate what the sale price and transportation cost for the sale of gas in the markets outside Azerbaijan will be,” Nasirov said.

Regarding the United States’ open support for the Şahdeniz project, Nasirov said, “We don’t want to be involved in games wherever or however they are being played.”

“We don’t think we will be involved in competition; after the Fukushima disaster in Japan, the demand for gas will only increase. And the gas of Azerbaijan will not and cannot make any negative effect on the other suppliers,” he said.

Nasirov also said Azerbaijan did not want to depend solely on one buyer for gas in the region. “Russia wants to buy all the gas we have, but we do not want to commit to only one buyer – we prefer diversity among the buyers, so we sell gas to the EU and Iran, as well as Russia,” said Nasirov.

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