Azerbaijan export pipeline issues prompt Cheney visit

Eric Watkins
Oil Diplomacy Editor

LOS ANGELES, Sept. 2 -- Russian Prime Minister Vladimir Putin claimed that his country's actions in recent hostilities with Georgia "did not in any way damage energy facilities"—including to the Baku-Tbilisi-Ceyhan oil pipeline.

Putin's remarks came ahead of a visit by US Vice-President Dick Cheney, who will arrive in Baku Sept. 4, before heading on to Georgia, Ukraine, and an economic forum in Italy.

Analysts said Cheney's visit is intended to secure US and European energy interests in the Caspian-Central Asian region following Russia's military incursion which last month shut down oil and gas export routes across Georgia.

During the hostilities, Georgia accused Russia of attempting to bomb all three of the main pipelines through the country during the conflict: the Baku-Tbilisi-Ceyhan and Baku-Supsa oil pipelines and the South Caucasus Pipeline, which carries gas to Turkey.

Anatoly Nogovitsyn, deputy head of Russia's general staff during the incursion denied early reports of attacks by his country on the BTC line, saying that, "The oil pipeline was never a target that needed to be bombed" (OGJ Online, Aug. 12, 2008).

Independent press reports, however, suggested that Russian warplanes targeted the lines, in addition to the main railway line connecting Azerbaijan with Georgia's Black Sea oil export terminals (OGJ, Aug. 25, 2008, p. 27). The attacks on the railway ended transport of some 50,000-70,000-b/d of crude and products.

In defense of his country's military actions, Putin said: "Russia does not pursue the purpose of interfering in any sort of energy processes in the region and did not in any way damage energy facilities on the Georgian territory."

In reference to the shutdown of the 1-million-b/d BTC line, Putin blamed it on terrorist attacks along the pipeline's Turkish sector, saying that, "There are terror attacks, there is damage, but we have nothing to do with that."

The Russian prime minister, who did not mention the other oil and gas export routes shut down due to the hostilities, said that, "We treat our energy facilities very carefully and we are not going to damage anything. We do not and cannot have such a purpose."

Meanwhile, industry analysts said US Vice-President Dick Cheney will be looking to secure strategic energy corridors feeding oil and gas to the West during his visit to the region this week.

Rasim Musabekov, a political analyst based in Azerbaijan, said that Cheney's visit is first of all connected with energy questions. Azerbaijan and Georgia are parts of a corridor supplying energy resources to Europe, and the US wants assurances that that Azerbaijan will continue oil and gas deliveries through Georgia.

Vafa Guluzade, a Baku-based political analyst and former presidential advisor, said the US is concerned that Azerbaijan will begin sending its energy resources through Russia instead of Georgia, and this question will be one of the main points of Cheney's visit.

While Cheney will doubtlessly express concern over existing oil and gas export routes in the region, analysts said that he also will want to ensure continued Azerbaijani support for the proposed Nabucco gas pipeline.

Azerbaijan is seen as the key potential supplier for the project, a 3,300-km pipeline that would run via Turkey and the Balkan states to Austria. Construction is scheduled to begin next year, with the completion date set for 2013.

In competition with Nabucco, Russia backs the rival South Stream gas pipeline, being built by Gazprom and Eni. The South Stream line involves construction of a gas pipeline under the Black Sea from Russia to Bulgaria, with further branches to Austria and Italy.

Contact Eric Watkins at hippalus@yahoo.com.

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