Baku in search of alternative routes

The prospect of the Turkish-Armenian border opening before the Karabakh conflict is resolved has forced the Azeri side to explore new ways of exporting its gas, Azeri President Ilham Aliyev has stated at a Government session.

Baku has started openly discussing certain issues which have not been discussed before. The transit of natural gas through Turkey costs Azerbaijan much more than the ordinary market price and having to make these payments has delayed the further exploration of the second stage of the Shah Deniz oil field. Aliyev also mentioned that Azerbaijan sells its natural gas at less than market price due to the very special relations between Turkey and Azerbaijan, but current developments and the signing of an agreement establishing diplomatic relations and opening the borders between Turkey and Armenia without first resolving the Karabakh issue has forced Baku to take adequate measures.

Due to such developments Azerbaijan has signed certain agreements with Russia’s Gazprom. Furthermore Aliyev made the rather sensational statement that Azeri gas could be sent to European countries without going through Turkey, meaning that the NABUCCO project would be frustrated for the time being at least.

The question is, who will benefit from such a development? It is unlikely that Ankara will gain much if Baku makes any new moves. The immediate winner in this situation is Russia, because if NABUCCO is frustrated Moscow will remain the sole supplier of natural gas to European countries.