- The Writer holds an MSc in Eurasian Political Economy & Energy from King’s College London and also an MA in European Studies from Sabancı University.
With proven reserves of 1.1 trillion cubic meters of natural gas and 7 billion barrels of crude oil at the end of 2015, Azerbaijan is one of the major gas and oil suppliers to the Turkish energy market. The largest portion of crude oil production comes from the offshore Azeri-Guneshli-Chirag field, located 100 kilometers away from the capital city, Baku. Although oil production peaked in 2010 at one million barrels per day (b/d), since then production has been decreasing and has stood at around 863 thousand b/d as of 2012, and 841.000 b/d in 2015, according to BP statistics.
Turkey’s historically strong ties with Azerbaijan have further strengthened close bilateral energy relations which, in the 1990’s, led to the idea of transporting Azeri crude oil to Turkey. When Azerbaijan was seeking an opportunity to leave Moscow’s orbit and orient itself towards the West, the realization of a Baku Tbilisi Ceyhan (BTC) oil pipeline in 2006 formed the backbone for initial cooperation. The BTC has proven a successful part of the east-west energy corridor.
In parallel to the BTC oil pipeline, the Baku-Tbilisi-Erzurum (BTE) gas pipeline was constructed in 2007. The BTE pipeline, as the Center for Middle Eastern Strategic Studies president Kardaş points out, “not only allowed Turkey to gain access to cheaper gas, but also equipped Ankara with a hedge against Moscow and Tehran.”
With another 1,841 kilometer-long gas pipeline project, the Trans Anatolian Natural Gas Pipeline Project (TANAP) will be carrying a total of 16 billion cubic meters (bcm) of gas, of which 6 bcm will be used by Turkey’s domestic consumers and the rest, 10 bcm, will be transported to the EU gas market through the Trans Adriatic Pipeline (TAP) project. Although insignificant in terms of volume, Azerbaijan has granted Turkey the right to re-export 1 bcm of Azeri gas, which means that Caspian gas has now started to be consumed in the EU energy market.
Thanks to the development of Stage I of the Shah Deniz project, Azerbaijan has started to export gas to Turkey via Georgia through the South Caucasus Pipeline. The Shah Deniz field will be important in diversifying EU supply sources and will remain an important part of the Southern Gas Corridor project, but given the volume of gas that will be transported, it is not anticipated to be a major game-changer as expected.
Additionally, the development of the Shah Deniz II project will likely boost Azeri gas volumes with an estimated doubling of production in the coming years. However, due to political turmoil and uncertainty in Middle Eastern sources, and the lack of desire from the Turkmen administration to bring the Trans Caspian pipeline online, the Shah Deniz Stage II project has become a cornerstone and an “enabler” of the Southern Gas Corridor.
To an increasing extent, Azerbaijan has played a critical role in the Southern Gas Corridor by introducing new projects while working with international energy companies and thus has created an environment for Turkey to achieve its target of becoming an energy hub in the region.
Consequently, other sources in the Middle East and Caspian region need to be deployed to strengthen the Southern Gas Corridor project and provide an alternative project to hedge against Russia’s dominance in the EU gas market. In this regard, Turkey should initiate a more proactive role in bringing other significant energy projects to the table to benefit from its central role as an energy bridge and to increase its potential of becoming a hub for both energy supplier and consumer countries.
- Opinions expressed in this piece are the author’s own and do not necessarily reflect Anadolu Agency's editorial policy.