Nabucco: Pipeline Politics

Nabucco: Pipeline Politics
Azerbaijan could scuttle the Nabucco pipeline over the Turkey-Armenia rapprochement, Brian Whitmore writes for RFE/RL.
By Brian Whitmore for RFE/RL | ISN

Azerbaijan could scuttle the Nabucco pipeline over the Turkey-Armenia rapprochement, Brian Whitmore writes for RFE/RL.
By Brian Whitmore for RFE/RL

Azerbaijan has apparently decided to play its energy card.

As much of the world applauded Turkey's historic rapprochement with Armenia last week, Azerbaijan felt left out in the cold and abandoned by its closest ally.

Baku had argued strenuously that a deal to reestablish relations between Ankara and Yerevan should not be signed while Armenia continued to occupy Nagorno-Karabakh, and it threatened to take unspecified countermeasures if one was.

Speaking at a nationally televised cabinet meeting on October 16, Azerbaijani President Ilham Aliyev revealed one of those steps: "It is not a secret to anyone that for many years Azerbaijan has been selling its gas to Turkey for one-third of market prices."

Aliyev added: "What state would agree to sell its natural resources for 30 percent of world market prices, especially under current conditions? This is illogical."

Aliyev presented the move as a purely commercial decision and did not explicitly link it to the Turkish-Armenian deal. Azerbaijan currently sells Turkey natural gas at the bargain rate of $120 per thousand cubic meters. But the timing of Aliyev's announcement, less than a week after the accord between Yerevan and Ankara was signed, left little doubt.

If Baku follows through on the move, analysts say it could severely undermine - if not completely kill - the Western-backed Nabucco pipeline project to bring gas from the Caspian Sea to Europe via Turkey.

"Potentially this is very important because it could potentially deliver a knockout blow to Nabucco. Without Azerbaijan it would be even more difficult than it is," says Federico Bordonaro, an energy-security analyst with the Italian-based group equilibre.net. Read more.