Azerbaijani Natural Gas Expansion Enhances European Energy Security

The Financial Times has a nice primer on Azerbaijan’s expansion of its natural gas reach that is well worth reading in full:

The latest example of Turkish-Azeri cooperation came with the signing Monday of a $3.4bn EPC contract between Azeri state oil company Socar and its Turkish partner Turcas and a consortium led by Spain’s Tecnicas Reunidas for the construction of a 10m tonnes/yr refinery at Aliaga on Turkey’s Aegean coast.

Owned 81.5 per cent by Socar and 18.5 per cent by Turcas, the STAR refinery is being constructed on a site adjacent to Turkey’s former state petrochemical firm Petkim which is now owned by Socar and is slated to start producing by autumn 2017.

Originally conceived to process Azeri crude arriving at Turkey’s Mediterranean oil hub of Ceyhan into primarily naphtha feedstock for Petkim, the plant’s design was later expanded to allow it to process all regional crudes and to produce low sulphur diesel, jet fuel and other products for local and regional markets.

Azerbaijan is one of the critical pieces in Europe’s long-term bid for energy security — a necessary precondition for the standards of government and living to which we have grown accustomed. Baku is not risking capital and putting all of this energy into its natural gas projects out of philanthropy, and that is precisely the point: by making markets accessible to Azerbaijan and encouraging its participation in them, Europe helps Azerbaijan in its decades-old quest to align itself more and more with Europe.

On a larger scale, every cubic meter of natural gas imported from Azerbaijan is a cubic meter not drawn from Gazprom, freeing Europe more and more from Russia’s hard economic power. Azerbaijan’s closer integration with Europe will not only help hasten its adoption of democratic norms, but will also help advance the resolution of one of the world’s remaining great hotspots: Armenia’s invasion and illegal occupation of the Nagorno-Karabakh.

So three cheers for capitalism and energy security: we don’t appreciate their benefits until deprived of them.

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