The One Big Problem With A Central Asian Energy Co
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Posted On: 01/25/2021 10:34:16 AM
The One Big Problem With A Central Asian Energy Corridor
By Alan Mammoser - Jan 24, 2021
In Moscow last week, President Vladimir Putin hosted the prime minister of Armenia and the president of Azerbaijan. It was the first meeting of the three leaders since the end of the six-week-long war over the Nagorno-Karabakh region last fall. They agreed to create a working group that will advise on how to reopen regional transport connections. It is to report back in March.
A key task will be to propose how to open a new transportation corridor, one that will traverse an obscure stretch of land, but with long-range implications for some of the world’s great energy producing regions.
A little piece of land
The tripartite ceasefire agreement that halted the war in November calls for restoring all economic and transport links through this contested part of the South Caucasus. It requires Armenia to guarantee the safety of transport links, to allow the free movement of people and goods between Azerbaijan and its southwestern ‘exclave,’ known as the Nakhchivan Autonomous Republic.
Azerbaijan’s exclave came about in an arrangement made by the Soviets following their occupation of the South Caucasus in 1920. It is a separate part of the country surrounded by Armenia, Iran, and Turkey. Currently, Nakhchivan has no direct road and railway connection with the main part of Azerbaijan. It is serviced by roads and pipeline in Iran.
While it may seem an odd geographical feature in a remote part of the world, it’s of potentially great importance. Nakhchivan touches on Turkey, just slightly, along a 10-mile long border with the far eastern Kars region of Turkey. The Turks insisted upon gaining this little strip of land in the Treaty of Kars of 1921, which finalized borders between Turkey and the USSR.
Now, with an impending agreement to open a free flow of traffic through southern Armenia, a linking of the mainland of Azerbaijan to Nakhchivan and thence to Turkey appears possible. Getting this ‘Nakhchivan Corridor’ through Armenia was a key part of Azerbaijan’s demands in the November agreement.
It is the latest move to more closely connect the two allies. In a Memorandum of Understanding signed last winter, the presidents of Azerbaijan and Turkey agreed to build a railroad connecting Nakhchivan to the city of Kars in eastern Turkey. It will connect to the 500-mile-long Baku-Tbilisi-Kars (BTK) railway, which opened in 2017 to carry cargo and passengers between Azerbaijan, Georgia, and Turkey. A pipeline is also in the works, bringing natural gas from Turkey into Nakhchivan. This will supplement the current supply of natural gas from Iran and give Baku more negotiating leverage with Tehran in arrangements to supply the exclave with gas. The new pipeline could open next year.
Turkey turns east
The replacement of Iranian gas should help Turkey, which has been importing an increasing amount of LNG from the United States, to improve relations with Washington. But the commercial and geopolitical implications of a corridor directly linking Turkey to Azerbaijan are just beginning to be considered. Turkey would appear to be the big winner. It will likely have a permanent troop presence in Azerbaijan as a result of the recent war. So its reach will extend to the Caspian Sea and possibly to the countries of Central Asia beyond.
Georgi Derluguian, Professor of Social Research at NYU Abu Dhabi and an expert on the politics of the South Caucasus, sees a resurgent Turkey wanting to move eastward.
"Turkey was in a quite vulnerable position for a long time after the founding of the Turkish Republic (in 1923),” he says. “Now, for the first time, Turkey is proactive."
Derluguian notes that in recent years Turkey has been increasingly asserting power in the Middle East. Now it could begin to influence events in Central Asia. Such appears to be an objective of Turkish President Recep Tayyip Erdogan, whose greater presence across the Caspian might be welcomed by countries facing difficult choices in an unstable region.
"Here Erdogan sees an opportunity to export Turkey's influence to Central Asia, where they speak Turkic languages, so there is a plausible claim that they're kindred co-ethnics," says Derluguian.
This raises the prospect, and for some the specter, of a vast Turkic corridor reaching from the borders of China westward to the Mediterranean. It could become a major trade route carrying goods and possibly energy from Central Asia westward, skirting Iran to the south. It might also open new routes for China’s Belt and Road infrastructure initiative.
Nothing will happen quickly, however, as means of transport across the Caspian will need to be enhanced. Moreover, the major infrastructure through the South Caucasus has been largely put into place. Azerbaijan and Turkey are well connected to the north of Armenia through Georgia, which plays a key role as transit country for rail and pipeline.
Georgia is now a central part of the 2,200-mile Southern Gas Corridor, which brings gas from the Caspian to Europe, providing an important alternative to Russian gas and improving security of supply for Europe.
This corridor is now complete. The South Caucasus Pipeline (also known as Baku–Tbilisi–Erzurum Pipeline), which runs parallel to the Baku–Tbilisi–Ceyhan oil pipeline, began delivering natural gas in 2006. It links to the Trans Anatolian Gas Pipeline (TANAP) through Turkey to Greece, which began operations in 2018. Now the Trans Adriatic Pipeline (TAP) from Greece to Italy is in place, beginning operation last fall with the first Azerbaijani gas delivered to Europe in December.
This pipeline system conveying natural gas from the Caspian Sea to Europe is well below capacity and should see expanding volumes in future years. This, together with the BTK railway, are new pieces of infrastructure that will not be duplicated anytime soon, ensuring that for the foreseeable future Georgia will remain a key transit country between Turkey and its ally to the east.
Getting started on friendly terms
While no disruption to current routes of commerce and energy through the South Caucasus appears imminent, the Nakhchivan corridor will likely be an object of increasing interest if significant agreements can be worked out. Many factors are at play.
There is the actual infrastructure, which will require expensive upgrades through an area that is quite mountainous. A rail line that traverses the Zangezur region through Armenia’s southern Syunik province once connected southwestern Azerbaijan to Nakhchivan. It was an important freight line for Armenia, which suffered from its closing off by Azerbaijan and Turkey during the Karabakh war in the early ‘90s. There is also a road along the Aras River that borders Iran.
Last month the Russian government indicated that it would like to see the rail line restored. Azerbaijani President Ilham Aliyev has also recently stated his intention to have it rebuilt. It could connect to others in Nakhchivan, including the new line to Kars and the BTK railway in Turkey, and to another north-south line to Iran.
Another problem is politics. Under the terms of the tripartite agreement signed in November, the corridor through Armenia is to be secured by border agents of the Russian Federal Security Service. Nevertheless, Armenia could create difficulties for the transit route through its territory. Russia, for its part, might wish to slow the eastward progress of its rival Turkey. And Iran will have concerns, being weary of a new route that reduces its revenues and its influence in Baku.
These countries might push for something more limited that would be useful just for local traffic between Azerbaijan and its exclave. Such a stance would likely discourage the Turks and Azerbaijanis from making the major infrastructure investments that would be required for a major transport corridor.
Perhaps anticipating this, and wanting to quell resistance while seeking to maximize the corridor’s potential, President Aliyev has recently struck a conciliatory tone. Last month he said he wanted an inclusive approach, with Russia, Turkey, Armenia and Iran all welcome to access a new route from Nakhchivan. He emphasized that a shared approach will be important for future multilateral cooperation.
Armenian Prime Minister Nikol Pashinyan has also recently indicated general support, saying that the opening of transportation routes with Azerbaijan would be important for his country’s economic prosperity. Indeed, Armenia would likely be rewarded with upgraded infrastructure as well as transit fees. Iran, too, could benefit if intelligent agreements about the emerging corridor are put into place.
The working group’s report, to come later this winter, will bear watching. But there is no doubt that progress on the Nakhchivan Corridor will require delicate geopolitical balancing.
"Russia cannot trust Turkey,” says Georgi Derluguian. “For all the public rhetoric through clenched teeth, they are objectively mortal rivals in too many places, and their recent history of relations is replete with tensions."
"I would look very skeptically at loudly proclaimed new possibilities,” he says. “Too many reefs ahead and too few reasons to expect cooperation."
By Alan Mammoser for Oilprice.com
https://oilprice.com/Energy/Energy-General/Th...ridor.html
By Alan Mammoser - Jan 24, 2021
In Moscow last week, President Vladimir Putin hosted the prime minister of Armenia and the president of Azerbaijan. It was the first meeting of the three leaders since the end of the six-week-long war over the Nagorno-Karabakh region last fall. They agreed to create a working group that will advise on how to reopen regional transport connections. It is to report back in March.
A key task will be to propose how to open a new transportation corridor, one that will traverse an obscure stretch of land, but with long-range implications for some of the world’s great energy producing regions.
A little piece of land
The tripartite ceasefire agreement that halted the war in November calls for restoring all economic and transport links through this contested part of the South Caucasus. It requires Armenia to guarantee the safety of transport links, to allow the free movement of people and goods between Azerbaijan and its southwestern ‘exclave,’ known as the Nakhchivan Autonomous Republic.
Azerbaijan’s exclave came about in an arrangement made by the Soviets following their occupation of the South Caucasus in 1920. It is a separate part of the country surrounded by Armenia, Iran, and Turkey. Currently, Nakhchivan has no direct road and railway connection with the main part of Azerbaijan. It is serviced by roads and pipeline in Iran.
While it may seem an odd geographical feature in a remote part of the world, it’s of potentially great importance. Nakhchivan touches on Turkey, just slightly, along a 10-mile long border with the far eastern Kars region of Turkey. The Turks insisted upon gaining this little strip of land in the Treaty of Kars of 1921, which finalized borders between Turkey and the USSR.
Now, with an impending agreement to open a free flow of traffic through southern Armenia, a linking of the mainland of Azerbaijan to Nakhchivan and thence to Turkey appears possible. Getting this ‘Nakhchivan Corridor’ through Armenia was a key part of Azerbaijan’s demands in the November agreement.
It is the latest move to more closely connect the two allies. In a Memorandum of Understanding signed last winter, the presidents of Azerbaijan and Turkey agreed to build a railroad connecting Nakhchivan to the city of Kars in eastern Turkey. It will connect to the 500-mile-long Baku-Tbilisi-Kars (BTK) railway, which opened in 2017 to carry cargo and passengers between Azerbaijan, Georgia, and Turkey. A pipeline is also in the works, bringing natural gas from Turkey into Nakhchivan. This will supplement the current supply of natural gas from Iran and give Baku more negotiating leverage with Tehran in arrangements to supply the exclave with gas. The new pipeline could open next year.
Turkey turns east
The replacement of Iranian gas should help Turkey, which has been importing an increasing amount of LNG from the United States, to improve relations with Washington. But the commercial and geopolitical implications of a corridor directly linking Turkey to Azerbaijan are just beginning to be considered. Turkey would appear to be the big winner. It will likely have a permanent troop presence in Azerbaijan as a result of the recent war. So its reach will extend to the Caspian Sea and possibly to the countries of Central Asia beyond.
Georgi Derluguian, Professor of Social Research at NYU Abu Dhabi and an expert on the politics of the South Caucasus, sees a resurgent Turkey wanting to move eastward.
"Turkey was in a quite vulnerable position for a long time after the founding of the Turkish Republic (in 1923),” he says. “Now, for the first time, Turkey is proactive."
Derluguian notes that in recent years Turkey has been increasingly asserting power in the Middle East. Now it could begin to influence events in Central Asia. Such appears to be an objective of Turkish President Recep Tayyip Erdogan, whose greater presence across the Caspian might be welcomed by countries facing difficult choices in an unstable region.
"Here Erdogan sees an opportunity to export Turkey's influence to Central Asia, where they speak Turkic languages, so there is a plausible claim that they're kindred co-ethnics," says Derluguian.
This raises the prospect, and for some the specter, of a vast Turkic corridor reaching from the borders of China westward to the Mediterranean. It could become a major trade route carrying goods and possibly energy from Central Asia westward, skirting Iran to the south. It might also open new routes for China’s Belt and Road infrastructure initiative.
Nothing will happen quickly, however, as means of transport across the Caspian will need to be enhanced. Moreover, the major infrastructure through the South Caucasus has been largely put into place. Azerbaijan and Turkey are well connected to the north of Armenia through Georgia, which plays a key role as transit country for rail and pipeline.
Georgia is now a central part of the 2,200-mile Southern Gas Corridor, which brings gas from the Caspian to Europe, providing an important alternative to Russian gas and improving security of supply for Europe.
This corridor is now complete. The South Caucasus Pipeline (also known as Baku–Tbilisi–Erzurum Pipeline), which runs parallel to the Baku–Tbilisi–Ceyhan oil pipeline, began delivering natural gas in 2006. It links to the Trans Anatolian Gas Pipeline (TANAP) through Turkey to Greece, which began operations in 2018. Now the Trans Adriatic Pipeline (TAP) from Greece to Italy is in place, beginning operation last fall with the first Azerbaijani gas delivered to Europe in December.
This pipeline system conveying natural gas from the Caspian Sea to Europe is well below capacity and should see expanding volumes in future years. This, together with the BTK railway, are new pieces of infrastructure that will not be duplicated anytime soon, ensuring that for the foreseeable future Georgia will remain a key transit country between Turkey and its ally to the east.
Getting started on friendly terms
While no disruption to current routes of commerce and energy through the South Caucasus appears imminent, the Nakhchivan corridor will likely be an object of increasing interest if significant agreements can be worked out. Many factors are at play.
There is the actual infrastructure, which will require expensive upgrades through an area that is quite mountainous. A rail line that traverses the Zangezur region through Armenia’s southern Syunik province once connected southwestern Azerbaijan to Nakhchivan. It was an important freight line for Armenia, which suffered from its closing off by Azerbaijan and Turkey during the Karabakh war in the early ‘90s. There is also a road along the Aras River that borders Iran.
Last month the Russian government indicated that it would like to see the rail line restored. Azerbaijani President Ilham Aliyev has also recently stated his intention to have it rebuilt. It could connect to others in Nakhchivan, including the new line to Kars and the BTK railway in Turkey, and to another north-south line to Iran.
Another problem is politics. Under the terms of the tripartite agreement signed in November, the corridor through Armenia is to be secured by border agents of the Russian Federal Security Service. Nevertheless, Armenia could create difficulties for the transit route through its territory. Russia, for its part, might wish to slow the eastward progress of its rival Turkey. And Iran will have concerns, being weary of a new route that reduces its revenues and its influence in Baku.
These countries might push for something more limited that would be useful just for local traffic between Azerbaijan and its exclave. Such a stance would likely discourage the Turks and Azerbaijanis from making the major infrastructure investments that would be required for a major transport corridor.
Perhaps anticipating this, and wanting to quell resistance while seeking to maximize the corridor’s potential, President Aliyev has recently struck a conciliatory tone. Last month he said he wanted an inclusive approach, with Russia, Turkey, Armenia and Iran all welcome to access a new route from Nakhchivan. He emphasized that a shared approach will be important for future multilateral cooperation.
Armenian Prime Minister Nikol Pashinyan has also recently indicated general support, saying that the opening of transportation routes with Azerbaijan would be important for his country’s economic prosperity. Indeed, Armenia would likely be rewarded with upgraded infrastructure as well as transit fees. Iran, too, could benefit if intelligent agreements about the emerging corridor are put into place.
The working group’s report, to come later this winter, will bear watching. But there is no doubt that progress on the Nakhchivan Corridor will require delicate geopolitical balancing.
"Russia cannot trust Turkey,” says Georgi Derluguian. “For all the public rhetoric through clenched teeth, they are objectively mortal rivals in too many places, and their recent history of relations is replete with tensions."
"I would look very skeptically at loudly proclaimed new possibilities,” he says. “Too many reefs ahead and too few reasons to expect cooperation."
By Alan Mammoser for Oilprice.com
https://oilprice.com/Energy/Energy-General/Th...ridor.html
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