Our Analytics 4 march — 17:16

Will Ilham Aliyev build power transmission line across Black Sea? (Our comment)

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BY ELNUR MAMMADOV, ECONOMY SECTION

We have repeatedly noted that Azerbaijan has ensured not only its own energy security, but also actively contributes to the implementation of energy security of other countries. If Azerbaijani oil has already managed to gain a strong place in the regional and world markets, then in the coming months Azerbaijani natural gas will reach Italy, transiting many Balkan countries. Recently, Baku has begun to export electricity to Europe, however, so far in modest amounts. But President Ilham Aliyev never rests on his laurels...

Ilham Aliyev does not rest on his laurels

Recently, the Minister of Economy and Sustainable Development of Georgia, Natia Turnava, said that her country's specialists together with their Azerbaijani colleagues discussed new projects in the Black Sea in Baku. During the meeting with the Minister of Economy of Azerbaijan, Mikayil Jabbarov, she emphasised that these projects can be implemented jointly with Azerbaijan in order to increase the competitiveness of the common corridor.

'We invest heavily in infrastructure in Georgia, including in port and railway infrastructure, and, of course, this will get even greater load and development, if the region as a whole uses this corridor. First of all, it depends on our relations and cooperation with Azerbaijan,' Turnava said. She emphasised that very close business and friendly relations were established between the two countries, the ministries of economy, which contribute to the development of joint terminal projects and the accelerated completion of the Baku-Tbilisi-Kars railway project and others.

Two neighbouring countries have created unique energy and transport corridors that you will not find in the world. And this cooperation began immediately after the conclusion of the 'Contract of the Century' in 1994. At first, the Baku-Supsa oil pipeline appeared, soon a more powerful route for the export of oil Baku-Tbilisi-Ceyhan (BTC), the terminal of the State Oil Company of Azerbaijan (SOCAR) in the Black Sea port of Kulevi appeared. After oil, new ways opened for the export of Azerbaijani gas. The low-power Southern Gas Pipeline (Baku-Georgia's border with Turkey) was replaced by the region's largest southern gas corridor, which includes an expanded first project along with such large-scale projects as Shahdeniz 2, TANAP, TAP, the total cost of which reaches an astronomical amount of 40 billion . dollars.

Low-power southern gas pipeline was replaced with the Southern Gas Corridor

Moreover, the initiator of these initiatives has always been Azerbaijan, which has large hydrocarbon resources. And they were financed from Baku. Georgia provided its territory for the transit of our hydrocarbons. The same picture developed when laying a new corridor - the railway. The Baku-Tbilisi-Kars railway has already connected the countries of the Far East with Europe, which until recently people could only dream of. The construction of the missing part of the Tbilisi-Turkish border road was also carried out at the expense of a preferential (1 per cent) loan from Azerbaijan.

And now the Georgian minister is already talking about completely new, interesting projects in the Black Sea, which may include relevant private or state Azerbaijani structures, which will generally increase the competitiveness of the transport and energy corridor common to the two countries. She presented her Azerbaijani counterpart a new initiative - the project of laying a high-voltage power line (transmission line) along the bottom of the Black Sea, which will connect Georgia with the EU energy market.

Black Sea project of Natia Turnava

Yes, Ms Turnava strongly emphasises that this project is an initiative of the Georgian side. At the same time, she is turning to Baku for support. The reason is simple. Firstly, the Georgian side does not have such volumes of generating capacities that could make the project economically attractive. Moreover, it annually imports electricity from neighbouring Azerbaijan. And secondly, the project requires considerable capital investments, which today represents big problems for Tbilisi. And if finances can still be attracted from European countries and banks, then resources must certainly be found in Baku. Indeed, in the immediate environment of Georgia there is no other country capable of exporting large enough volumes of electricity.

This is what the Georgian minister emphasises: 'Naturally, this project will be of greater importance and commercial attractiveness if the region participates in it, including Azerbaijan, which today is our reliable partner, supplying electricity in those periods when the Georgian market felt its deficit.'

Thus, the initiative of the Georgian side has been voiced, Baku has yet to carefully analyse it. Of course, consumers on the other side of the Black Sea will not give up ready-made electricity at favourable rates. But it is difficult to say whether this initiative is supported by convincing calculations, whether a feasibility study has been developed, or whether markets have been studied. After all, Azerbaijani electricity is already exported to Turkey and Europe. And now Baku is offering a new export route. Moreover, fraternal Turkey - one of the main and reliable partners in other regional projects - remains on the sidelines.

It is gratifying, of course, that they turn to us for help, and Azerbaijan never refuses its neighbours. In addition, the cost of electricity in Europe far exceeds the domestic tariff. But will there be enough resources for this, because they are still limited, the reader will think. And it is right, the export agreement is a serious matter. And here we get the answer to a long-standing question: why did Azerbaijan have to build so many generating capacities in recent years, reconstruct the existing ones, and now develop alternative energy. The energy strategy of President Ilham Aliyev, developed in the 2000s, is ready for any challenges.

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