A thousand people came to a Turkish hillside two weeks ago to commemorate an almost $8 billion-dollar pipeline that will carry natural gas from Caspian Sea “Shah Deniz” gas fields of Azerbaijan through the Georgia Republic into Turkey and then, later, connect to Adriatic Sea gas pipelines to Southern Europe.
It is called TANAP. “Trans Anatolian Gas Pipeline (TANAP), designed to carry gas from Azerbaijan via Turkey to Europe.” Among the 1,000 people were the presidents of Turkey, Georgia, Azerbaijan, Ukraine and Serbia.
Natural gas is expected to start moving through the pipeline this summer. The project was first announced six years ago. It is financed and being built through a coalition led by Azerbaijan’s national oil company SOCAR and junior partners of Turkey’s national gas company and British Petroleum (BP).
Oil-related construction is not new to Azerbaijan considering that the world’s first oil derrick was conceived and built in Baku, Azerbaijan in 1846. Baku’s oil production led the world in 1900 and provided 80 percent of the Soviet Union’s oil and gasoline during the Great War with Germany in World War II. Baku’s war-time production of oil was so important that Adolf Hitler sent two entire armies to seize it from the Soviets. They were stopped at the Battle of Stalingrad.
The history of Baku oil and natural gas is replete with foreign ownership starting in the 19th century with the entire oil industry controlled by international business people like a Rothschild, the Nobel brothers and others; when the Soviets entered the picture in 1920, the new “Communist” country expropriated Baku oil. It stayed in Soviet hands until Azerbaijan declared independence and reclaimed the industry for the people of Azerbaijan.
Modern Azerbaijan began in 1994 the day it signed a 30-year deal — a “contract of the century” — with a gaggle of European and American companies to exploit the vast oil reserves within its Caspian Sea territory; the deal was 20 percent-owned by the new government oil company, SOCAR and it totaled out to $7.5 billion dollars. What was left of the Soviet Union — Russia — vehemently objected to the deal even after the Russian Lukoil company was granted a 10 percent cut.
Russia’s Foreign Ministry “was categorically opposed to the deal.” The ministry complained that it violated Soviet-Iranian treaties governing use of the oil-rich Caspian Sea signed in 1921 and 1940.
That original contract with the Western consortium benefited the oil companies, Azerbaijan and with pipelines, Georgia and Turkey. The only Caucasus country that hasn’t benefited is Armenia. The TANAP project and the new agreement between Azerbaijan and the Western Consortium signed in September 2017 avoid Armenia altogether.
Armenia never had the opportunity to participate in the original 1994 or the new deal of September 2017 with the Western Consortium and its delivery of Baku oil to the West due to its military occupation of 20 percent of Azerbaijan. The pipelines, including TANAP’s, simply are routed around Armenia. Impoverished Armenia bitterly complains being bypassed by oil and gas pipelines through Georgia and Turkey and about the millions of dollars in transit fees it could be collecting — as well as the jobs Azerbaijanis, Georgians and Turks have enjoyed in pipeline construction.
Armenian ally Russia suffers, too. Little oil and gas transits Russia from Baku. Russia used to absorb Baku oil production because it owned it. This is one more bite out of the formerly powerful Soviet Empire.
On the surface this TANAP pipeline project doesn’t look like much in a world of pipelines and, by itself, won’t significantly dent Russian natural gas exports into Europe, but it’s a start.
Russia’s state-owned natural gas company has provided some 40 percent of Europe’s gas needs. Gazprom produced 16.6 trillion cubic feet of gas. By comparison, the United States produced almost 27 trillion cubic feet of natural gas in 2017 and, according to the U.S. Energy Information Administration, is on track to produce 43 trillion cubic feet of natural gas by 2050.
What the future portends is that with Azerbaijani natural gas flowing through TANAP and its European extensions and Liquefied Natural Gas (LNG) shipments from the U.S., the Russian oil/gas hammer it has held over Europe is shrinking if not disappearing.
Raoul Lowery Contreras is the author of The Armenian Lobby and U.S. Foreign Policy and “Murder in the Mountains: War Crime in Khojaly.” He also wrote for the New American News Service of the New York Times Syndicate.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.