Financial Times
By Isabel Gorst in Moscow
Published: April 25 2009 03:00 | Last updated: April 25 2009 03:00
A rapprochement between Turkey and Armenia this week provided further evidence of a shift in the balance of power in the South Caucasus that is propelling gas-rich Azerbaijan closer to Russia, analysts said.
The process that began when Georgia went to war with Russia last summer over its breakaway territories of South Ossetia and Abkhazia, could jeopardise European plans to reduce dependence on Russian gas by importing extra Caspian supplies. Azerbaijan views the announcement on Wednesday by its ally Turkey and historic foe Armenia of plans to normalise ties as a betrayal that would leave it relatively isolated in the South Caucasus, where Armenia already enjoys strong ties with Russia and Iran.
Ilham Aliev, the president of Azerbaijan, has intensified pressure on Turkey, suggesting during a visit to Moscow this month for talks about gas and the disputed region of Nagorno Karabakh, that a Turkish betrayal could hit bilateral gas trade.
Disagreements between Turkey and Azerbaijan over gas prices and transit terms have undermined European plans to build the Nabucco pipeline to carry extra Caspian gas across the South Caucasus to Europe.
Mr Aliev said Azerbaijan could export some gas through the planned Nabucco pipeline to Europe, but warned it was “difficult to say when this project will move from a dead end and who will do it”.
Azerbaijan opened gas talks with Russia last year after the war in Georgia exposed the vulnerability of pipelines crossing the South Caucasus that have allowed Turkey to emerge as a crucial energy hub in the area.
Mr Medvedev said the “chances were very high” that Russia would soon clinch a gas import deal with Azerbaijan.
Edward Chow, a senior fellow at the Washington-based Center for Strategic and International Studies, said: “It makes sense [for Azerbaijan] to appease Russia by sending some gas that way,”. It was unlikely that Azerbaijan would compromise its independence by exporting all its gas to Russia, he added.
Mr Aliev said the settlement of the Nagorno Karabakh conflict could end Armenia’s exclusion from oil and gas export projects in the South Caucasus.
European diplomats said Russian efforts to broker a settlement of the Nagorno Karabakh conflict could help restore its international image in the aftermath of the war in Georgia. But analysts said Russia was exploiting separatist tensions to strengthen its grip on the South Caucasus.
Copyright The Financial Times Limited 2009