BAKU. November 10, 2008: Baku is a popular destination these days and it’s not because of Azeri food. Azerbaijan’s energy resources have attracted the attention of Russia, Europe and the United States who are eager to secure supplies from the next phase of the Shah Deniz project with reserves estimated to at least equal the nine billion cubic metres produced by the project’s first phase. That gas is now sold at home and to Turkey and Georgia.

The EU Energy Commissioner rushed to get his passport stamped in Baku on November 7, promptly declaring that Azerbaijan was a strategic energy partner of the EU. Andris Piebalgs discussed with Azerbaijan President Ilham Aliyev, Minister of Energy and Industry Natig Aliyev and Foreign Minister Elmar Mammadyarov the establishment of a Southern Gas Corridor, which will transfer energy resources to the EU from Central Asia and the Caucasus region, bypassing Russia.

Piebalgs pointed to the existing Baku-Tbilisi-Ceyhan oil pipeline as an example of a successful project, and to the Baku-Tbilisi-Erzurum gas transit pipeline project as an inspiration for the bilateral energy cooperation. Both projects cross Georgia leading to Turkey, making the Muslim country an important hub for Caspian hydrocarbons to Europe. Turkey would also be an active player in the planned Southern Gas Corridor, namely the Nabucco project the pipeline whose supporters hope will one day bring 30 billion cubic metres of Caspian gas a year to an Austrian hub via Georgia, Turkey, Bulgaria, Romania and Hungary  and ITGI, which is one day hoped to carry 12 billion cubic metres of Caspian gas a year via Turkey and Greece to Italy.

It is no coincidence that Piebalgs, whose Nabucco tour originally included Turkey, Azerbaijan, Turkmenistan and Georgia, still visited Ankara and Baku, despite time constraints. “These were the obvious choices because Turkey is going to be the main transit country and Azerbaijan is the country which is going to provide the first gas,” Ferran Tarradellas Espuny, spokesman for Piebalgs, told New Europe.

“Geography kind of pushes you to do certain things,” Ron Smith, chief strategist at Moscow’s Alfa Bank, told New Europe, adding that “Turks politically are a pretty reliable country.” One of the few options for transporting gas to southern Europe is either through Turkey or running it along the bottom of the Black Sea. Russia’s South Stream, a projecting competing with Nabucco and ITGI, has opted for the latter, bypassing both Ukraine and Turkey. Piebalgs, who held talks in Ankara with Prime Minister Tayyip Erdogan, President Abdullah Gul and Energy Minister Hilmi Guler, wants “a transit intergovernmental agreement in January 2009 at the latest,” his spokesman told New Europe.

Christian Dolezal, a spokesman for the Nabucco consortium, also told New Europe that the intergovernmental agreement is currently being discussed at the political level. “We don’t know exactly when it will be signed,” Dolezal said, adding that “January would be a good time for that.” “What we know is that Hungary is now organising a Nabucco meeting in January and this could be, of course, the place where something like that could be signed. But we have to wait for the outcome of the political talks right now,” Dolezal said. He explained that the intergovernmental agreement would be at ministerial level between Turkey and all the transit countries for Nabucco: Austria, Hungary, Bulgaria and Romania.

An Azeri official told New Europe on the customary condition of anonymity that Azerbaijan has enough gas to supply both the ITGI and the first phase of Nabucco. “So many years I’m hearing this and every time I see the doubts that Azerbaijan doesn’t have enough gas. Azerbaijan has sufficient gas to supply to Europe,” he said frustrated, adding that the Azeri government has repeatedly declared its support for Nabucco.

The Azeri official stressed that by no means would his country sell all of its gas to Russia, even though its large neighbour has offered to buy it at appealing market prices. “They will not buy all the gas because Azerbaijan has also other obligations,” he said (by Kostis Geropoulos, the European Daily).