Natural Gas Supply to Europe: Azerbaijan’s Energy Policy

Azerbaijan is one of the key countries in the Caspian region that exports crude oil to the global energy market. However, the discovery of the huge natural gas reserves on its offshore territory, the start of negotiations with Turkmenistan to establish a legal framework for constructing the Trans-Caspian Pipeline, and the recently signed gas agreements have also made Azerbaijan a major natural gas exporting country. Nowadays, supplying natural gas to European markets through the Southern Corridor is the main focus of Azerbaijan’s energy policy. The Southern Corridor, a central part of the country’s energy diversification policy, is the only westward route for exporting hydrocarbons from the Caspian. Supplying natural gas through pipelines creates a long-term linkage and increases interdependency between suppliers and consumers, which in turn makes the process more vulnerable from the political point of view. By pursuing a multi-dimensional energy policy, Azerbaijan has taken a cautious and balanced approach, where political interests along with economic interests play a key role in defining priorities within the long-term energy projects. This paper analyzes Azerbaijan’s natural gas supply policy focusing on specific factors affecting current pipeline politics, along with the shifting security dynamics within the Southern Corridor

Authors: Sevinj Mammadova