Baku and Ashkhabad to bridge Caspian gap

Azerbaijan and Turkmenistan may start the process of rapprochement in
political and economic spheres. The basis for dialogue between the
states may become cooperation in the energy sphere, notwithstanding
the fact there are some serious unresolved issues in the sphere
between Baku and Ashkhabad.
For Azerbaijan and Turkmenistan, oil and gas are the common
foundations of the two states' wealth. Meanwhile, the Caspian Sea has
divided the interests of the neighboring states rather than unifying
them. For 15 years of post-Soviet history, relations between states
shifted from thaw to a cooling several times. Until now, Turkmenistan
has not put up with the fact that in the beginning of the 1990s their
western neighbor started developing resources in the Caspian region,
which Ashkhabad considered an area for debate. Turkmenistan still
insists that part of the largest Azerbaijani oil-field
"Azeri-Chirag-Guneshli" is located in Turkmen territory. Ashkhabad has
even threatened to bring a case before the international court.
However, just before the celebration of Independence Day in
Azerbaijani, the ambassador to Turkmenistan put out a statement which
indicates positive progress in Azerbaijani-Turkmen relations.
The statement says that as energy powers both states are "researching
the potential of cooperation in the energy sphere" and "focus on the
strengthening and modernization of their oil-and-gas complexes". The
beneficial locations of Azerbaijan and Turkmenistan on the border of
Europe and Asia provides opportunities for effective use of this
geo-economic feature of the states, regarding their development and
mutual cooperation.
This gesture of the Azerbaijani side is not just some kind of eastern
diplomacy. Taking into consideration the fact that just several years
ago the states didn't have stable diplomatic relations, this statement
is remarkable.
Ashkhabad has shifted to constructive dialogue in relations with Baku,
since it realizes the negative effect of confrontation, which will
spoil its chances of entering the European energy markets.
Very soon Turkmenistan will feel a need for closer cooperation with
Baku. The German RWE, which holds shares in the Turkmen oil-fields, is
planning to sign gas-supplies agreement with Ashkhabad until the
second half of 2010. The supplies will be carried out through the
pipe-line "East-West", with a capacity of 30 billion of cubic meters a
year. The pipe-line is still under construction and will run through
the territory of Turkmenistan, connecting its oil-field with the
Caspian Sea.
Russia earlier declined to take part in the "East-West" project, as in
this case Turkmenistan would have an alternative to gas supplies
through Russia's pipe-line, in particular "Nabucco". Ashkhabad has
already opened China's energy market, but to enter the European one it
needs cooperation with Baku and a resolution of Caspian status issues.
The crisis-hit European Union has lost many opportunities for a
promotion of its gas project. Experts say that Nabucco will be put
into operation four years after the scheduled date at the earliest.
Moreover the future of the project depends on whether EU and
Turkmenistan reach an agreement on gas supplies.
Baku has nothing against trans-Caspian cooperation but initially slows
down the process of negotiations, leaving the resolution of all
questionable issues for Ashkhabad and Brussels. Azerbaijan will not
benefit from investing into the construction of the Nabucco pipeline
or any other facilities, as the country doesn't have enough gas to use
the capacity of the pipeline in full. In case of cooperation with
Turkmenistan, Baku will play the role of a transit partner. Anyway,
Azerbaijan can supply Europe with gas by other transit routes and it
currently doesn't have a lack of European consumers.