Associate Director of the Eurasia Energy Center at the Atlantic Council in Washington, Alexandros Petersen, spoke with Trend Capital in an exclusive interview.

Trend Capital:
Who are the main energy supplying players in the Caspian region in your opinion – Russia, Turkey, Azerbaijan or Turkmenistan? Especially what is the position of Azerbaijan in this competition?

Alexandros Petersen: For Europe and the broader West, the most important energy producing country in the Caspian region is Azerbaijan. This is because Azerbaijan not only has significant reserves of its own, but it is also a gateway to vast reserves on the Caspian’s eastern shore and further into Central Asia, including Turkmenistan, Kazakhstan and Uzbekistan.  Azerbaijan is also important because it is already supplying Western countries with oil through the Baku-Tbilisi-Ceyhan pipeline, its gas goes through the South Caucasus Pipeline and it is the most likely producer country at the moment to supply the Nabucco gas pipeline.  

Russia is enormously important for European consumers, both as the greatest single source of natural gas, and as a security of supply problem due to its energy geopolitics, which are an official part of its foreign and defense policies.  

Turkmenistan hold enormous potential and will be a growing player in the region and globally in terms of natural gas, but the central question about Turkmenistan is whether its resources will primarily go east or west.  Turkey is becoming the world’s biggest energy hub, but we must not forget that it is still dependent on Russian gas – even more so than many European countries.

Q: Recently Turkey and Russia signed an agreement about the Blue Stream, and there are opinions that this project dismisses NABUCO at all. Also Azerbaijan recently signed a document with Russia promising to sell its gas to her. Do you believe all these steps dismiss Nabucco project?

A: The recent agreement signed between Baku and Moscow for 0.5 bcm yearly exports to Russia was merely a symbolic move.  The volume of gas exported is very low and does not present a significant shift in terms of Azerbaijan’s energy orientation.  In fact, the main result of the deal was to speed up the Nabucco signing process.  It is my opinion that Baku signed this deal mainly as a warning shot to Western countries to remind them that Azerbaijan has other options than Nabucco for gas exports.  The other recent deal signed between Turkey and Russia concerned the planned South Stream pipeline from Russia to Europe through the Black Sea.  The limited, technical agreement allowed for Gazprom to begin tests in Turkish waters to determine whether South Stream could be routed through there as opposed to Ukrainian waters.  This is a very small step for a pipeline project that is not very realistic from the beginning: South Stream is too expensive and its planned capacity is too large for it to be a viable, undersea project.  South Stream is a paper tiger to combat Nabucco, but it should not be considered a viable project.

Q: In the nearest future Turkmen president is planning to go on a trip to Turkey. US has always been pointing out that Turkey and Azerbaijan should encourage Turkmenistan to be involved into the Europe gas supplying projects.  What do you believe Turkey and Azerbaijan can do in this situation?

A: Unfortunately, at the moment, Baku and Ashgabat are in the midst of a dispute over Caspian basin reserves. That makes it very difficult for Azerbaijani decision-makers to have influence on Berdymuhammedov’s trip to Turkey.  I hope the Turkish government underlines the importance of export diversification for Turkmenistan, particularly the Western-oriented option, probably Nabucco, due to the fact that unlike options to China and Russia, the Western-oriented route brings with it all kinds of related investment, diplomatic links and incentives for regional integration and strengthened independence.

Q: The US states that it is interested in Europe’s energy diversification, but at the same moment US says that it wants that there are projects in the region where Russia could also participate. So which of the statements is a really honest one?

A: The primary objective of the U.S. in terms of Eurasia’s energy geopolitics is to see the development of market-oriented projects, particularly those that simultaneously open the countries of the Black Sea-Caspian region to world markets and global diplomatic links, and tie the EU and Eurasian countries more closely together.  This policy does not exclude Russia.  So far, it is Russian policies that have excluded Russia from a process of greater energy and political independence for the countries of Eurasia.

This interview originally appeared as “Azerbaijan is key country for Europe in Caspian region: associate director at U.S. Atlantic Council” at the Trend Capital website.