Dr. Kenan Aslanlı wrote for AA Analysis on the reflections of the energy crisis that started with the Russia-Ukraine war on the Caucasus region.
US political scientist and statesman Zbigniew Brzezinski metaphorically likened Azerbaijan to “the cork in the bottle, containing the energy riches of the Caspian basin and Central Asia”. In fact, this interesting analogy can be used for the entire Caucasus region, especially in the context of Europe’s complicated energy crisis that emerged in 2022 with the military intervention of Russia in Ukraine.
The Caucasus, which is one of the key regions of the geopolitical equation in Eurasia, can be approached in two ways in terms of energy geopolitics. The first is as an energy transit route from Central Asia to Europe or with a north-south route, and the second as a source region with energy reserves and renewable energy capacities.
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The South Caucasus region as an energy transit route, in addition to the export of Azerbaijan natural gas through the Southern Gas Corridor project and other pipelines, the flow of Kazakhstan and Turkmenistan crude oil to world markets through Azerbaijan, Georgia and Turkey (Baku-Tbilisi-Ceyhan Oil Pipeline). is performing.
Some of the Azerbaijani oil is transported to the Russian Black Sea Port of Novorossiysk via the North Caucasus.
On the other hand, during the current energy and natural gas crisis that Europe is facing, the export of Turkmenistan natural gas to Europe via the Caspian Sea, Azerbaijan, Georgia and Turkey has come to the fore again.
One of the important obstacles to the export of Turkmenistan gas to Europe via the South Caucasus is the ecological demands, which are quite vaguely expressed in the “Convention on the Legal Status of the Caspian Sea” signed in Aktau, Kazakhstan on August 12, 2018.
According to the convention, riparian countries, underwater pipelines to the bottom of the Caspian Sea; These infrastructure projects, including the “Framework Convention for the Protection of the Caspian Sea Marine Environment” signed in 2003 and its additional protocols (especially the “Transboundary Environmental Impact Assessment Protocol in a Transboundary Context” adopted by the Caspian Sea riparian countries in Moscow on 20 July 2018). provided that it fully complies with the environmental requirements specified in the international agreements to which they are a party. The part of the convention dealing with ecological demands prohibits all projects and activities that “damage” the biodiversity of the Caspian Sea. The above-mentioned legal documents, It will be very useful if it is examined in depth by a working group consisting of international law and international relations experts in Turkey.
Russia, which is trying to maintain its strategic superiority over the European gas market, and Iran, which wants gas exports from the Caspian Sea region to be made through its own territory, signed the Legal Status Convention of the Caspian Sea, the Framework Convention on the Protection of the Caspian Sea Marine Environment and its additional protocols, Turkmenistan and Trans-Caspian Natural Gas Pipeline. If they run against the pipeline, the region’s possible gas export projects will be adversely affected.
The European Union (EU) declared the Trans-Caspian Natural Gas Pipeline project, which may have a final capacity of 32 billion cubic meters per year, as the “Project of Common Interest” with strategic importance. The USA, on the other hand, proposed a shortened version of this pipeline project called “Trans-Caspian Interconnector”.
It is unclear how China, which can attract 75 percent of Turkmenistan’s gas exports (31.5 billion cubic meters in 2021), can react to the export of Turkmen gas to Europe via the Caspian Sea and the South Caucasus. The volume of gas imported from Turkmenistan corresponds to 60 percent of the total gas imported by China through pipelines in a year. If China joins the opposition of Russia and Iran regarding the export of Turkmen gas to Europe via the Caucasus, the activation of this energy route may be even more difficult. It should not be forgotten that the war in Ukraine has brought China and Russia strategically closer to each other.
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New energy transitions and energy corridors are also forming in the Caucasus region.
Azerbaijan plans to export electricity to Romania and other European countries via Georgia via power lines under the Black Sea.
In addition, in the Shusha Declaration on Allied Relations signed between Azerbaijan and Turkey on June 15, 2021; It was underlined that, in addition to the Southern Gas Corridor, the two countries could contribute to regional energy supply security in the field of electricity.
Another important development in this direction is Serbian President Aleksandar Vucic; He asked President Recep Tayyip Erdoğan to assist in the transfer of Azerbaijan’s electrical energy to his country. In the upcoming period, electricity produced by Azerbaijan can be exported to Europe after natural gas. In fact, European companies are willing to invest in Azerbaijan’s renewable energy sector so that it can export more natural gas to Europe during the energy crisis.
The South Caucasus region frequently witnessed energy projects that failed as well as realized energy transition projects. For example, the Azerbaijan-Georgia-Romania Interconnector (AGRI) project; It was envisaged that Azerbaijan’s natural gas would be transported to Kulevi on the Black Sea coast of Georgia by pipelines, the gas would be liquefied in the specially built terminal there, and then delivered to the terminal in Constanta Port of Romania with these tankers. The regasified natural gas could thus be transferred to other European countries. It should not be forgotten that, like the AGRI project, the Nabucco or Nabucco West projects were interrupted in the 2010s due to various geopolitical and geoeconomic reasons. Turkmenistan for the Nabucco Pipeline project; It could supply Europe with 10 billion cubic meters of gas per year directly over the Caspian Sea or via Iran via the planned Trans-Caspian Natural Gas Pipeline. Although the Nabucco Pipeline project did not materialize, as an example of regional energy cooperation, a triple gas swap agreement was signed between Iran, Azerbaijan and Turkmenistan in November 2021, which envisages the annual transportation of 1.5-2 billion cubic meters of natural gas.
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Developments in Iran directly affect the energy geopolitics of the Caucasus. The Iranian side is trying to turn the energy crisis that emerged with the Russia-Ukraine War and the new energy geopolitics equation into an advantage. Within the scope of the memorandum of understanding (MoU), which was signed with Russia in July 2022 and includes energy investments of 40 billion dollars, Iran, It offers the Russian side to import natural gas directly through Azerbaijan or export it to other countries with a barter agreement. If an agreement is reached between Iran and Russia on the exchange of natural gas or electricity through Azerbaijan, the Caucasus region can literally turn into a new energy route on the north-south route.
At the same time, the issue of synchronization of electricity networks between Russia, Iran, Azerbaijan, Armenia and Georgia often comes up. This issue concerns both the dimensions of being the energy (electricity) route of the Caucasus region and meeting the energy demand in this region. The ongoing geopolitical and geoeconomic repercussions of Russia’s military intervention in Ukraine, the military and political developments in the Azerbaijan-Armenia equation, and the ongoing confusion around Iran’s nuclear program can have an impact on the plans for joint execution of strategic energy projects in the Caucasus region. remains unclear.
Regional energy competition and cooperation trends in the Caucasus occur in parallel with each other. For now, we are discussing the geopolitics of traditional fossil fuel-based energy, but the geopolitics of renewable energy continues to increase the importance of the Caucasus region in the current energy crisis and energy transition period.
[Dr. Kenan Aslanlı İRAM Enerji ve Politik Ekonomi Araştırmacısı]