Friday, 6 April 2012

Azerbaijan and Turkey: Back to the Drawing Board on TANAP Pipeline? | EurasiaNet.org

Azerbaijan and Turkey are showing that even for the closest of strategic allies it’s not always smooth sailing. And it’s not especially a surprise that energy issues are what’s causing the two cultural cousins to bicker.

Few bilateral relationships have been closer during past two decades than Azerbaijan’s and Turkey’s, with strong linguistic and cultral ties acting like diplomatic super glue. But the bond has weakened in recent weeks, amid wrangling over a lucrative energy export arrangement to transport Azerbaijani gas westward.

Last December, the two countries signed a memorandum of understanding to construct a $6-billion pipeline, known as TANAP, to carry gas from Azerbaijan’s Shah Deniz-II field via Georgia to Turkey and on to Europe. Under the original pipeline plan, Azerbaijan’s State Oil Company of the Azerbaijani Republic (SOCAR) would hold an 80-percent stake, and two Turkish state-owned companies BOTAŞ (Petroleum Pipeline Corporation) and TPAO (Turkish Petroleum Corporation) would have 10-percent stakes each.

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