The ninth ministerial meeting on the Southern Gas Corridor is being held in Baku on February 2-3, at which EU representatives are discussing deepening energy cooperation with Azerbaijan. These days, in the case of Romania, a new gas contract between Socar and Romgaz for next year is being initialed. European plans are to significantly increase the amount of Azerbaijani gas that can be delivered to Europe in the coming years, with an accelerated EU separation from Gazprom, and in July 2022 the EU and Azerbaijan entered into a strategic energy partnership. It is planned that the EU will be able to buy about 20 billion cubic meters of Azerbaijani gas by 2027, compared to about 8 in 2021 and 12 in 2022, a matter that also involves the development of the relevant infrastructure.

All press reports on this topic are optimistic: Azerbaijan will not only help us get rid of Russian gas in our region, but we will even expand energy cooperation in other areas. For example, last December in Bucharest, an agreement was signed between Azerbaijan, Georgia, Romania and Hungary on the construction of a submarine cable in the Black Sea, through which we can buy renewable electricity. Both in Romania and in the EU, Azerbaijan is seen as a way out of the energy security crisis that we are going through in the next few years. Possible problems—we replace dependence on one authoritarian regime with dependence on another authoritarian regime—neglect. After all, in the coming years in the EU we will import only 15-20 billion cubic meters from Azerbaijan, a tenth of what we import from Russia, in the worst case the situation will be manageable, right?

Even if the import of Azerbaijani gas is a good solution for diversification in the current energy crisis, the following must be taken into account:

• an authoritarian regime that makes money from state-owned oil and gas companies can use the proceeds from sales to finance internal repression and external aggression. It happened with Russia, it is happening in Azerbaijan. In recent years, the Aliyev regime has intensified the suppression of all forms of internal dissent, increased the number of political prisoners, and Azerbaijan is becoming increasingly aggressive in its war with Armenia. If we have learned anything during 2022, it is that it is unacceptable that the money of the European natural gas consumer is used to strengthen an authoritarian regime, and this will also be bitterly addressed by us later.
• Transit of natural gas from Azerbaijan is carried out through Turkey. In recent months, Turkey has announced its intention to become a regional gas hub, but the idea is controversial: Erdogan’s Turkey has greatly increased its dependence on Russian gas in recent years, while Putin is trying to find an outlet for the gas it no longer has. finds buyers in Europe. There is a legitimate concern that Russia could use the Turkish hub to continue exporting to the EU in a less visible way by doubling Turkish Stream capacity to Turkey. The EU needs to make sure that Turkey does not become a gateway for covert exports of Russian gas to some countries in Southeast Europe, and at the same time, that there are no undesirable consequences of increasing the dependence of the Southern Corridor on the support that Turkey is already providing to Azerbaijan in the war with Armenia.
• the dependence of the EU on the source of gas imports should not be considered in aggregate at the level of the entire Union, but in the form of dependence of each individual member state. It is the same for Gazprom and for Azerbaijani gas. For the last 10 years, Gazprom has used the leverage of its dependence in some countries (Germany, Bulgaria, Hungary, etc.) to get concessions in Brussels because of the position of the governments of these countries – and because important European decisions are made unanimously. The fact that the EU will only import 10-15% from Azerbaijan compared to what it imports from Russia should not cause us to sleep on one ear if Romania or Bulgaria completely replaces one source with another. It is important to diversify our sources in the region as much as possible in order to have another bargaining power in Azerbaijan gas contracts.

The solution to these problems is quite simple, but it needs to be thought about from time to time and applied consistently.

• Making the purchase of Azerbaijani gas dependent on the observance of human rights in Azerbaijan and the transparency of the use of money paid by Europeans. We need Azerbaijani gas, but Azerbaijan also needs the European market, so these conditions can really be set; and various EU institutions are already following with concern the latest escalation of the conflict between Azerbaijan and Armenia with the blocking of the Lachin Corridor by Azerbaijan or have a critical position on human rights violations. A consistent, clear and balanced approach is needed. The EU can exert diplomatic pressure to resolve these issues and even condition gas purchases, for example, on Azerbaijan’s return to the Extractive Industries Transparency Initiative (EITI). EITI is a global initiative aimed at making transparent the money that circulates between governments and companies in the extractive sectors (oil, gas and others), how the government uses this money in the budget (preferably for public services, not for arms and repression). under the monitoring of civil society, and 10 years ago, Azerbaijan was one of the most advanced countries in the region in the application of EITI standards. The Aliyev regime withdrew from the EITI in 2017 precisely because of a desire to keep contracts and money in the sector secret and to remove the protection from repression that membership of the international EITI initiative had to some extent provided to civil society activists on the ground, that is, a large part of civil society as a whole, given the importance of oil and gas for the economy of Azerbaijan. There is no legitimate reason why the purchase of Azerbaijani gas cannot be contingent on Azerbaijan’s re-entry into the EITI. The negotiating leverage is all the stronger because there is a need to finance the expansion of transportation opportunities for Azerbaijani gas, which also comes at the expense of European money (for example, the EBRD).
• European EU countries that will have access to this gas (especially from southern and eastern Europe, Romania, Bulgaria, Slovakia, Hungary, as well as Serbia, which is part of the single European energy market), should diversify their energy sources, since energy, except for Azerbaijani gas Indeed, efforts are being made to expand LNG capacity in Greece or Croatia and increase connections in the region. But at least in Romania, the air that “we slept on one ear” – we are betting on domestic production, as it is, on the fact that demand fell this winter, and on imports from Azerbaijan. At the same time, we are keeping pace with domestic production (on land is shrinking, the BSOG field in the Black Sea barely covers part of imports, the Neptun Deep project is in the same phase as 4 years ago, as well as the Romgaz Caragele project); and plans to expand gas consumption due to new networks and replacing coal with gas have not changed yet. Romania, in turn, should become a serious player on the regional gas market and a supplier of energy security for neighboring countries – Moldova, Hungary, Bulgaria; we would become a regional competitor for Azerbaijani gas, and not depend on it.
• The transformation of Turkey into a regional gas hub ultimately depends on the position of Europe on this matter, which will be the main partner. A gas hub means not only physical infrastructure (Turkey is located at the intersection of all the routes by which gas from the Caspian zone, Iran or Russia could reach Europe), but also a whole set of rules, mechanisms and institutions to ensure the conclusion of contracts and the trust of partners. For European buyers, the EU can and should introduce transparency conditions for imported gas to avoid Russian gas entering Europe through the back door, as well as to ensure real competition with other players on the European market for domestically produced gas or other imports. the entire article and commentary at contributors.ro