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25/09/2016

Future uncertain for TAP and DESFA, following European Parliament vote

Energy

Future uncertain for TAP and DESFA, following European Parliament vote

This flagpole, in Baku, is believed to be the second tallest in the world. [Georgi Gotev]

Relations between Azerbaijan and the EU have reached deadlock, and Baku may lose interest in major energy projects, such as the TAP pipeline, and the Greek natural gas operator DESFA, diplomatic sources have informed EurActiv.

A recent resolution adopted by the European Parliament has triggered strong reactions in Baku, who blames the EU for manipulation action and “dirty” political games against Azerbaijan.

With 365 votes in favor and 202 against, as well as 72 abstentions, on 10 September, a majority of lawmakers, lead by the S&D, GUE-NGL, ALDE and the Greens, adopted a highly critical resolution on the situation in Azerbaijan. The centre-right European People’s Party (EPP) voted against it.

The chairman of the Foreign Relations Committee, German MEP Elmar Brok [CDU], said that there had been a violation of the rules of procedure, as the issue should have first been discussed in the committees, before being brought to the plenary session.

“Or you can lose Azerbaijan,” he is reported to have said.

In its resolution, the European Parliament called for the negotiations for a Strategic Partnership Agreement with Azerbaijan to be immediately put on hold, as long as Baku fails to take concrete steps in advancing respect for universal human rights.

MEPs petitioned the EU to conduct a thorough investigation into the corruption allegations against President Aliyev and members of his family, as revealed by the work of investigative journalist Khadija Ismaylova.

>>Read: Azeri court sentences prominent journalist to jail

“An organized political action”

The Parliament of Azerbaijan called an extraordinary plenary session to respond to the European Parliament vote. Ogtay Asadov, the Speaker of Azerbaijan’s legislature, called the resolution “an organized political action” against his country.

He emphasised that the voting procedure was manipulated, and blamed the European Parliament for taking a biased stance on his country.

“I am sure that these political games aimed against Azerbaijan were deliberately planned and carried out,” he said.  According to Asadov, one of the main objectives of the adoption of this resolution was to isolate the country from Europe, damage its reputation, and thus weaken Azerbaijan’s position in its ‘frozen conflict’ with Nagorno-Karabakh.

Asadov added that there was “unbreakable unity between the people and the government” and urged Azeris to unite around the President “as a slap in the face of all the conspiracies against us”.

Gas projects under threat

Azerbaijan plays a key role in EU’s efforts to diversify its gas sources.

Brussels wants to bring Azeri gas to Europe by 2019-2020 via the Southern Gas Corridor, of which the Trans Adriatic Pipeline (TAP) is part, as the first real step to decrease energy dependence in Russian gas, especially in Southeastern Europe.

The 870 kilometre (545 mile) pipeline is planned to connect to the Trans-Anatolian Pipeline (TANAP) near the Turkish-Greek border at Kipoi, and cross Greece and Albania, and the Adriatic, before reaching southern Italy.

Azerbaijan is also the majority owner of the Greek gas distribution system, DEFSA. In 2013, Azerbaijan’s SOCAR company bought a 66% stake in the company, reportedly at the insistence of the European Commission, to fend off attempts of Russian companies to become owners of the Greek grid.

But in November 2014, the Commission opened an in-depth investigation to determine whether the acquisition of DESFA SOCAR is in line with the EU’s Third Energy Package.

Diplomatic sources told EurActiv that the European Parliament’s resolution had greatly contributed to Baku’s disenchantment with the EU, and that there was a risk that Azerbaijan would sell all its gas to Turkey and “forget about the EU”.

However, Azerbaijan cannot sell its 66% share in DESFA for a reasonable price.

“Who would buy the gas system of a totally unpredictable country, where there is no certainty that people will pay their bills?” an unnamed diplomat commented.