Closing speech by Ilham Aliyev at the second meeting of the Southern Gas Corridor Advisory Council

First of all I’d like to welcome Madame Mogherini, and express my gratitude to her for joining the closing session of the Advisory Council of the Southern Gas Corridor. This morning we opened the discussion with vice president Sefcovic, and we are closing the discussion with two vice presidents of European Commission. This is a good illustration of the importance the European Union is paying to this particular project and to the issues related to energy security.

Our relations with European Union, which, of course, we will today broadly discuss with Madame vice president, have a good history and a very big potential for development. It is not only energy security – we work jointly on a number of issues related to political dialogue, economic cooperation. European Union is our main trading partner. Almost half of our trade is trade with member states of European Union. We work closely on the issues related to security in the region, predictability, multiculturalism, cultural diversity. Azerbaijan, I think, proved for many years of cooperation that it is a reliable partner, and we want to strengthen our bilateral ties with member states, and with European Union in general.

By the way, I would like to inform you that together with one-third of the member states of European Union Azerbaijan has already signed or adopted declarations or agreements on strategic partnership. So this reflects, actually, the substance of our cooperation.

Today I would like to express special gratitude to vice-president Sefcovic for his personal valuable contribution to the implementation of the project of the Southern Gas Corridor.

A year ago, in Baku, we had the first Advisory Council, and I’m very glad that now we have the second council a year later. This shows that this process will continue. I am sure that these meetings will be traditional until we implement this large-scale project. I also want to use this opportunity and express gratitude to the government of the United States and personally to Mr. Hochstein for his contribution, and express gratitude to your government for continuous support shown to Azerbaijan in the implementation of all our energy initiatives, which started more than twenty years ago. Today the role of the United States in helping to implement this project is very important and I am sure that fruitful cooperation will continue and we will see good results also in the future.

I would like to express gratitude to all the members of the Advisory Council for active participation, for contribution to today’s discussion and also for underlying in the declaration, to be signed very soon, the strategic role of Azerbaijan as a key enabler of the Southern Gas Corridor. We are very grateful for this appreciation of our role, we are grateful that our initiatives to establish this format of Advisory Council were supported by our partners, by European Commission. We see practical results, we see good results of this format of cooperation.

During last year, of course, we spent a lot of time in bilateral and multilateral formats to address important issues. But this is a unique format where all the members of the Southern Gas Corridor, financial institutions, European Commission, United States get together to review what has been done and to plan for the future. Last year, 2015, was a successful year of the implementation of the project. We spoke about that this morning. I am sure that 2016 also will be very important and crucial in the implementation of this project. I am sure that we will resolve all the outstanding issues in order to clean the way towards successful and timely implementation of this project.

The Southern Gas Corridor is one of the largest infrastructure and energy projects in Europe. Multi-billion investment, more than 40 billion investment will be made in all the four segments of the project. And on all the four segments of the Southern Gas Corridor we have very good progress. It’s a project of partnership, cooperation. We established a strong partnership and, as Madame Mogherini mentioned, it is not only energy as today we established partnership for many years to come. Our cooperation will not end after the completion of the project, it will continue and be a more active cooperation after we implement the project because all of us will be inter-related, inter-dependent. The project of the Southern Gas Corridor for many years will bring benefits to all of us – to producers, to transit countries, to consumers. It’s a project of energy security.

As I said this morning energy security today is one of the most important elements of the national security of countries. This is a project of energy diversification. In the Southern Gas Corridor we see diversification of not only routes, but sources, which is more important.

It is a project of sincere cooperation and partnership between us. So far, the only resource base of the Southern Gas Corridor is gas from Shahdeniz, which has more than one trillion cubic meters. As you know, the reserves of Azerbaijan, the proven reserves are more than 2.5 trillion cubic meters. Therefore, I am sure, that the future projects, which we plan to implement together with our partners, will bring additional volumes to this project. We are building the pipeline, which can deliver large volumes of gas, much more than what we planned to produce in 4-5 years. Therefore it is a long term project of energy cooperation, diversification, stability, predictability.

The Southern Gas Corridor project is changing the energy map of Europe. Azerbaijan will get access to a big market, which is regulated by rules, practice and legislation, and European consumers will get gas from a reliable, friendly, source, a new source, which can provide the supply for decades. And I am sure that will happen because all the projects, which Azerbaijan initiated during the last twenty years, were successful.

Azerbaijan is a country where the first oil in the world was produced in the mid-19th century. And then in the mid-20th century the first oil from the official platform was also produced in Azerbaijan. Just three years after restoration of independence Azerbaijan signed the contract, which was known and is known as the Contract of 20th century. For the first time in the world we opened Caspian Sea reserves for foreign investments and invited foreign oil companies to be our partners. And I’d like to express my gratitude today to BP as our main investor and strategic partner and the company which has strong commitment to Azerbaijan and works with us already for more than twenty years. And also to SOCAR – Azerbaijan’s State Oil Company – which transformed as a result of this international cooperation into one of the major energy companies of the world.

In 1994, we were just three years old, three years of independence. Madame Mogherini mentioned that today part of our discussion will be devoted to resolution of the conflict between Armenia and Azerbaijan. Just four months after the ceasefire regime between Armenia and Azerbaijan was established we signed that contract in September 1994. Unfortunately, during all these years the conflict didn’t find its resolution because of unwillingness of Armenia to withdraw its troops from occupied territories, unwillingness to implement four United Nations Security Council resolutions demanding immediate and unconditional withdrawal of the Armenian troops from the territory of Azerbaijan.

In 1993, we had a civil war in Azerbaijan. Economy was ruined, it was in stagnation, inflation was more than 1000%. In these circumstances, foreign companies believed in our future, believed that Azerbaijan is a reliable partner and signed the deal in 1994, which actually laid a foundation for today’s project. If we look at the history of achievements, we`ll see that in 1994 the agreement on Azeri-Chirag-Guneshli oil field, which is one of the biggest oil fields in the world, was signed. Two years later, in 1996, again the agreement was signed between SOCAR and a BP-led consortium on Shahdeniz project, which is today a resource base for the Southern Gas Corridor. Then, the construction of Baku-Supsa oil pipeline to connect for the first time via a crude oil pipeline the Caspian and Black seas was started. In 1997, first oil was produced by the BP-operated consortium from the offshore field of Chirag. Then we had a period of active cooperation, investments, and a groundbreaking ceremony of Baku-Tbilisi-Ceyhan oil pipeline took place in 2003. In 2006, the inauguration of Baku-Tbilisi-Ceyhan pipeline took place. For the first time Caspian-Mediterranean was linked with an oil pipeline and without that pipeline today Azerbaijan’s economic development would have been absolutely different from what it is today.

In 2007, a gas pipeline connecting Azerbaijan, Georgia and Turkey was inaugurated, which is today under expansion. This project is an important segment of the Southern Gas Corridor. In 2011, a memorandum of understanding was signed between European Commission and Azerbaijan on strategic cooperation in energy sector. It was a very important document to stimulate diversification. In 2012, a historical agreement was signed between Turkey and Azerbaijan on the construction of TANAP pipeline, Trans-Anatolian, which is now being successfully implemented. Frankly speaking, without that agreement today situation would have been completely different with respect to this project. Then, investors after that agreement agreed and made a final investment decision on investing in Shahdeniz-2 project. That was in 2013. In 2014, a groundbreaking ceremony of the Southern Gas Corridor took place here in Baku. In 2015, a groundbreaking ceremony of TANAP took place in the Turkish province of Kars. Hopefully, 2016 will be the year of a groundbreaking ceremony of TAP project. And then 2018 will be the year of the completion of TANAP, and a year, maybe a year and a half later the completion of the project.

So if you look at the project from this point of view, you will see that without the history of cooperation and investment, today`s achievement wouldn’t have been possible. All what we are planning now is based on the solid foundation. During all this period of time Azerbaijan showed itself as a very reliable and capable partner.

We established very close relations with neighbors, with many countries of European Union. And today we witnessed this very efficient and very frank and sincere cooperation. The main purpose of creating this format of the advisory board was to have coordination because we are all now are one team: Azerbaijan, Georgia, Turkey, Greece, Bulgaria, Albania, Italy. I am very glad that representatives from Croatia and Montenegro also participated in today’s meeting and this shows that we will have more extensions of the Southern Gas Corridor. Reserves of Azerbaijan`s gas and potential additional reserves and infrastructure, which we plan and build, will allow us to bring our natural resources to many more countries. We need to successfully implement the project and I think that today’s achievement shows that this will be possible on time. Then we will build on that project our strategy for long term and for that purpose, of course, this cooperation and coordination should continue, and I`m sure it will continue.

I would like to use this opportunity and to invite you to visit Azerbaijan next year to attend the third Advisory Council of the Southern Gas Corridor. I am sure that by that time we will hear good reports about new achievements. I wish you all success, and thank you for your participation.