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    Is Turkey Helping or Hurting the Southern Corridor?

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Summary

Internal politicking between Baku and Ankara seems likely to doom those prospects to anchor Turkmenistan into the Southern Gas Corridor to Europe, for some time.

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Natural Gas & LNG News, News By Country, Azerbaijan, Turkey, Turkmenistan, , Nabucco/Nabucco West Pipeline, Trans-Adriatic Pipeline (TAP) , Top Stories

Is Turkey Helping or Hurting the Southern Corridor?

On September 3rd, a group of officials travelled to Turkmenistan to pay homage to the country’s energy wealth and its ambitious plans for gas exports in all directions. Nothing new there, except that this time the officials came from Turkey, Azerbaijan and the EU. It is comparatively rare for representatives of multiple states to make the trip to Ashgabat together, evidence that their purpose was more multilateral than usual.

They were attempting to anchor Turkmenistan into the Southern Gas Corridor to Europe, but internal politicking between Baku and Ankara seems likely to doom those prospects for some time.

The visiting delegation comprised Turkish and Azerbaijani Energy Ministers Taner Yildiz and Natig Abbasov, and EU Energy Commissioner Gunther Oettinger (EU Acting Director for the Internal Energy Market Jean-Arnold Vinois was also apparently in town). They met with Turkmenistan’s top energy officials including President Gurbanguly Berdymuhammedov and Energy Minister Myrat Artykow.

Their overall aim was to present a united front from all three key elements of the Southern Corridor - the consumer, the transit country and the initial producer – and reconfirm Turkmenistan’s commitment to supplying gas to Europe.

This seems to be mission accomplished, at a rhetorical level at least: President Berdymuhammedov said that Turkmenistan “is interested in the speedy establishment of a reliable, stable system of transportation of energy in various directions, including Europe”. Reading between the lines this is not quite the ringing endorsement that Turkmenistan gave for European gas supplies in late 2010, indicating the government’s increasing wariness about European reliability.

The EU also used the opportunity to try and restart negotiations on a Trans-Caspian Pipeline. These were announced with great fanfare by the EU last September, with Commissioner Oettinger proclaiming that “Europe is now speaking with one voice” – unfortunately the states actually involved in a TCP weren’t, and appeared to be shouting over one another instead. The EU-backed talks have been suspended since June.

The Ashgabat discussions resulted in a vague pledge to restart the talks but the European Commission is apparently waiting for further commitments from both Baku and Ashgabat, which are unlikely to be forthcoming.

Interestingly, EU energy spokesperson Marlene Holzner suggested to media that a TCP could link up with the original (and supposedly defunct) Nabucco Classic, rather than Nabucco West, and also observed that the Trans-Anatolian Pipeline which killed off Nabucco Classic lacked a feasibility study. This seems like an indication that the EU is still backing Nabucco rather than TANAP despite the changing realities. Holzner did not respond to a request for comments in time for publication.

But the biggest news from the talks was Turkish minister Yildiz’s pronouncement that Ankara wanted Turkmen gas in the Trans-Anatolian Pipeline, and that Turkey was keen to mediate between Baku and Ashgabat on their Caspian boundary dispute. On paper this sounds helpful, but Turkey’s eagerness is likely to meet a very cool reception in Azerbaijan.

Baku brooks little interference in the Southern Corridor and the Caspian, especially in its difficult relations with Turkmenistan. Azerbaijan has dragged its heels on a TCP partly because of politics but also for commercial reasons. Its reluctance to settle the maritime border dispute with Turkmenistan and push ahead with a TCP reflects its ambivalence about competitive Turkmen gas entering the Southern Corridor, not its inability to diplomatically engage with Ashgabat.

So Turkish attempts to mediate will be viewed by Baku as unwanted meddling, not fraternal assistance. Officials in Baku remember all too well the disputes with Ankara over pricing and contract terms for Nabucco back in 2009, which almost derailed the project entirely. Turkey’s ambitions to be a regional energy hub have a habit of backfiring.

As if to underline the point, on 8 September a senior Iranian energy official announced that Yildiz and his Iranian counterpart Rostam Qasemi had agreed to transport Turkmen gas to Europe overland, avoiding the Caspian – and Azerbaijan too. It would then join a new dedicated pipeline. Other reports recently have suggested that a tender for the pipeline would take place before the end of the year, although this is unconfirmed.

This is not new, as such: the so-called ITE project has existed on paper since 2008. The plan is almost certainly not going to happen, largely because of the sanctions regime against Iran, but resurrecting it at the moment looks like a subtle challenge to Azerbaijan’s pivotal role in the Southern Corridor.

Azerbaijan still holds enough cards to brush off the challenge, particularly its determination to hold a deciding stake in TANAP and thus refuse Iranian gas. But Turkey’s pro-active stance is likely to sour the atmosphere between them, and could slow down the Southern Corridor.