US-Azerbaijan sign deal on gas pipelines

Gulf Daily News (Bahrain), Vol XXX, No.4

Saturday 24th March 2007

US Secretary of State Condoleezza Rice yesterday inked a strategic alliance with Azerbaijan to promote gas pipelines that aim to stimulate competition against Russia’s grip on the energy market.

Neither Rice nor her Azerbaijani counterpart, Elmar Mammadyarov, spoke to reporters after signing the memorandum of understanding but a US statement said the deal mainly was aimed at facilitating pipeline projects that bypass Russia.

The deal calls for a « high-level dialogue to deepen and broaden already strong cooperation among governments and companies to expand oil and gas production in Azerbaijan for export to global markets, » the State Department said.

« Of particular focus will be realisation of the Turkey-Greece-Italy gas pipeline, and potentially the Nabucco and other pipelines, with Azerbaijani gas, to help Europe bolster its energy security by diversifying its natural gas supplies. » The Nabucco pipeline project aims to diversify central Europe’s sources of gas supplies by linking eastern Turkey with Austria.

The United States regularly accuses Russia of using its energy resources, particularly its natural gas, for political ends in ex-Soviet republics. « What we are trying to do is to increase competition so that the European gas market isn’t as dysfunctional as it is right now, » the US deputy assistant secretary of state for European and Eurasian affairs, Matthew Bryza, said. « We are not going to pressure anybody but we are going to do anything we can to help eliminate disinformation and smooth investment process, which means negotiate the framework agreements, » he said.

Bryza added that in time, the improved competition should even help Russian energy giant Gazprom, which has « a huge market share already. » Europe relies on Russia for 25pc of its gas.