Chingiz Veliyev: Empty Pockets Push Romania to Fantastic Projects and a Fight with Kiev

The interview for Information Agency REGNUM Novosti with an independent Azerbaijani expert in fuel-energy sphere Chingiz Valiyev.

IA REGNUM: Could You please comment on the statement of the State Secretary of the Ministry of Economy, Trade and Business of Romania Tudor Serban that OGIR project of natural gas transportation from Caspian region to Europe through the territory of Azerbaijan and Georgia can be accomplished faster than NABUCCO?

The more problems with Azerbaijani natural gas transportation from the stage-2 of “Shah Deniz” project arise, the more “exotic” projects appear. The strange thing is that despite the fact that NABUCCO project isn’t still completely designed, to choose my words carefully, its “brothers” keep growing. As a rule, they are developed by the states that are forced to create such fantastic projects due to empty pockets. Moreover, the feasibility studies of the specified by Mr.Serban variant of gas transportation weren’t yet performed. As for Azerbaijan, it welcomes another free PR-campaign around “huge” gas resources.
IA REGNUM: What do You think was the reason for such a great difference in Romanian and Azerbaijani assessments of the OGIR project cost?

Indeed, in due time the Head of Azerbaijani state petroleum company SOCAR Rovnag Abdullayev speculating on this project declared that the accomplishment of OGIR will cover from 7.5 up to 14 billion dollars. How will SOCAR get this money is a mystery. But I think, that in any case not from Romania or Georgia. Besides, National companies Romqaz (Romania) and SOCAR, which are suggested for the construction of liquid gas export and import terminals have no such experience at all. Omitting the fact that they don’t possess a technology for liquefaction and degasification of natural gas. On what basis does the State Secretary of the Ministry of Economy, Trade and Business of Romania Tudor Serban say, that the cost of the project can vary from 4 to 6 billion Euro which is twice lower than the estimations which are given by Abdulayev, this is unclear. It’s also unclear what will be the scope of liquid gas and how many gas carriers will be required for the delivery of liquid gas from one shore of the Black Sea to another one.  There are also other issues. For example, which will be the level of the load, where will they stay during the time free of deliveries, what will be the attitude of Turkey, which is an upholder of the transportation through Bosporus due to the evident reasons.
IA REGNUM: According to Tudor Serban, already in this March Romania plans to conclude a corresponding three-party treaty with Azerbaijan and Georgia. Is that real?

I guess, that in SOCAR there is a huge pack of protocols of intention to transport Azerbaijani hydrocarbon raw materials this or that way even without this one. Naturally, the issue of natural gas liquefaction is not new and was introduced in times of the late Turkmen President Saparmurat Turkmenbashi. Already then, the calculations showed that the construction of the natural gas liquefaction factory on the cost of Caspian Sea is not profitable and despite the huge gas reserves of Turkmen gas in comparison with Azerbaijani ones the issue was declined. So the idea of Romanian Minister about Caspian-Black Sea region in not new and unique.
IA REGNUM: Which unclear moments exist within OGIR today and what obstacles can Azerbaijan face after the signing of the three-party Treaty with Romania and Georgia?

First of all we don’t know the scope of Azerbaijani gas treasure we are talking about. If it is real that huge as it is declared, than several NABUCCOs could have been filled with it for a long time. But if the scope covers only the one that remains from the stage-1 of Shah Deniz project after export to Georgia and Turkey, then we can be pretty sure that a half of Azerbaijan will be left without energy.

Besides. It’s a pity that Romania doesn’t hurry to announce how many years it intends to purchase gas in accordance with the OGIR project and doesn’t point the formula for the cost determination of the Azerbaijani “blue fuel” to purchase. And Georgia still keeps silent about its appetite on the tariffs for transit and other services.

I should remind that Azerbaijan has already faced that by the supplies of its natural gas to Turkey, where having the cost formula in the contract the Parties can’t reach an agreement for more than two years. Not mentioning the arguments on the tariffs for Azerbaijani gas transit through the territory of Turkey. As known, Romania is one of the poorest states of the European Union, and has gained fame with a high-scale corruption, which calls doubts that it will get the money to accomplish the above mentioned project either from the EU or other lending institutions.

Except for that, the situation with gas prices today in Europe is so sad currently, that there will hardly be plenty of those striving to finance another costive project.  Even NABUCCO project has been stuck for several months already.

It’s left to add that as usual economy is tightly connected with policy. And that is why it’s easy to predict that OGIR project accomplishment will inevitably lead to the worsening of problematic relations between Romania and Ukraine and at the same time will challenge the cooperation of Kiev with Baku and Tbilisi within the framework of GUAM.
Translated by Eurodialogue.org from REGNUM Novosti