Ilham Aliyev attended “Diversification strategies” roundtable of the Munich Security Conference

An energy security roundtable entitled “Diversification strategies” has been held as part of the 51st Munich Security Conference.

President of the Republic of Azerbaijan Ilham Aliyev attended the roundtable.

Chairman of the Munich Security Conference Wolfgang Ischinger greeted the participants of the event and President of Azerbaijan Ilham Aliyev.

Wolfgang Ischinger said the scope of the issues discussed at the Munich Security Conference is broadening, adding energy security was added to the agenda in 2013. He thanked President Ilham Aliyev for participating in the discussions.

The host of the event then gave the floor to the President of Azerbaijan.

The head of state addressed the roundtable.

Speech of President Ilham Aliyev

- Thank you very much. First of all thank you, Ambassador Ischinger, for invitation. It is a big pleasure for me to be in Munich again. Thank you for having this discussion because, really, the issues of energy security can not be separated from the issues of national security. The issues related to energy policy are strongly linked to national interests and to the global political map of Europe in our region.

Azerbaijan, of course, is playing its role in providing energy security to its neighborhood, and now after signing important agreements on Southern Gas corridor we are becoming an important partner for Europe. We have already managed to diversify our energy supply routes.

Azerbaijan is a landlocked country. Therefore in order to have major investments in production we needed to have routes of transportation. Therefore in the very beginning of our energy strategy back in 1994 we managed to attract major investments from the international consortium of oil companies to investing in production of oil and gas. We started to build gas pipelines which connected the Caspian Sea with Black Sea and with Mediterranean for the first time in the history. So we already built those corridors. A decade ago when Baku-Tbilisi-Ceyhan oil pipeline was commissioned we already made an important step towards ensuring energy security of Europe. Today oil from Azerbaijan makes some 30-40 percent in the energy balance of some European countries. And now it`s time for gas, as we say. Huge Shahdeniz field is the big asset for Azerbaijan. It is one of the biggest gas fields in the world. Since 1996 together with BP and other partners we have worked to develop this field. We already produce and we already supply Azerbaijani gas to the regional markets. All our neighbors, including Georgia, Turkey, Iran and Russia get Azerbaijani gas. An important decision was made in 2012 when we signed an agreement with Turkey on Trans-Anatolian gas pipeline - TANAP. That was a real breakthrough in the energy security of Europe because without that agreement the Southern Gas corridor would today remain just a good idea.

In 2013, Trans-Adriatic pipeline - TAP was selected as a major supply route. On September 20, 2014 a groundbreaking ceremony of the Southern Gas corridor was held in Baku. So now everything is ready, and we already started to implement the major energy project, major infrastructure project of Europe which will cost, together with Shahdeniz development and pipeline construction, at least 45 billion dollars of investment. What we need now?! We need very efficient coordination between all the members of this team. In previous times we had regional cooperation – Azerbaijan, Georgia and Turkey. Only the three countries, and we managed to implement Baku-Tbilisi-Ceyhan, South Caucasus Gas Pipeline and also a railroad project which will soon be commissioned. But now when we have members of the European Union in our team we need to have more coordination and more flexibility because sometimes regulations in the European institutions take a lot of time. We face some issues related to bureaucracy and we can not waste time because this project is needed for us as producers, for transistors and for consumers.

It is clear that gas from Azerbaijan is the only new gas source which European consumers will get in the nearest future. As regards all the other projects, including projects of diversification of the routes, it is just routes, not sources. And our source is new and our source is, if I may say so, fresh. Shahdeniz field has more than one trillion cubic meters of gas. Together with other fields our proven reserves are at least 2.5 trillion cubic meters. So it is a gas project for decades, for hundreds of years. It will seriously change the energy map of Europe.

We initiated the first meeting of the Consultative Council of the Southern Gas Corridor which will be held February 12 this year in Baku. We invited all the high-ranking officials from all the countries involved. Azerbaijan, Georgia, Turkey, Bulgaria, Greece, Albania, Italy. So this is so far the team plus at the later stage we will involve our partners in the Balkans. Memorandums of understanding have already been signed with Croatia and Montenegro. So we need coordination and we need strong support from European institutions, at least, we should not waste time for some bureaucratic procedures. I think there should be a special approach to this particular project - maybe to separate it from the general rules and procedures that sometimes take a lot of time. Flexibility was what we had in the implementation of the first projects when there were just the three of us - Azerbaijan, Georgia and Turkey. We need the same level of flexibility and the same level of trust in this case. TANAP, TAP, Shahdeniz 2 are major investments, and not only Azerbaijan, but BP, Turkey are the biggest investment partners. So we need to recover these investments.

Frankly speaking, with the price of oil now something more than 50 dollars for barrel it will be very difficult to make this project commercially viable. This project must also be realized. It is a project of energy security, first of all. It should be treated as a project of national security of the countries involved. At the same time, taking into account our huge gas reserves we can incorporate countries which are not yet part of this Southern Gas Corridor, but part of Nabucco. We can incorporate them into our system. Bulgaria, for instance, was not a member of TAP in the beginning. But we have Bulgaria in our team. It could be an interconnector between either Greece-Bulgaria or Turkey-Bulgaria. So the contract with Bulgaria has already been signed. This means that one of the members of Nabucco team is already part of TAP. We can go even further through Romania, Hungary, Austria. The amount of gas of Azerbaijan will be enough plus potentially there could be other gas sources from the neighborhood. Then it will be a project of a larger scale.

I would like to say that we are on the right track, we are on the schedule. Construction has already started, pipes have already been ordered, contractors selected. We are committed to implementing the first part - TANAP by 2018, TAP by 2020. But we need coordination, more support and more mutual trust between all the members of the team.