Germany: After Trump's attack on energy ties with Russia, Merkel begins to take an interest in Azerbaijani gas

German Chancellor Angela Merkel will travel to Azerbaijan to discuss the development of a southern pipeline to supply gas to Europe from the Caspian, according to the Reuters news agency.

The visit highlights Merkel's intention to open up to research alternative sources of gas at affordable prices, although the commitment remains in the Nord Stream 2 gas pipeline, which will transport gas directly from Russia, under the Baltic Sea to Germany.

"We have a great interest in further developing the Southern Corridor ... This is part of the EU diversification strategy to obtain gas from other regions, not just Russia, to Europe," said a senior German government official.

In Baku, Merkel will discuss energy issues, including improving infrastructure to help transport gas from Azerbaijan to Europe via Turkey.

Azerbaijan appears to be destined to play a crucial role as it plans to launch the second phase of a gas pipeline from the vast Shah Deniz field to Europe. Shah Deniz II is expected to produce 16 billion cubic meters of gas annually by 2020, with 10 billion cubic meters destined for Europe and 6 billion cubic meters for Turkey and Georgia.

Thereafter, the gas could be brought from Turkmenistan, Iran and Iraq to Europe. As a sign of progress, Iran, Russia, Kazakhstan, Turkmenistan and Azerbaijan agreed in principle this month on how to potentially divide the huge oil and gas resources of the Caspian Sea.

However, the southern pipeline is offset by Nord Stream 2, a Gazprom initiative that will double Russia's export capacity to Europe to 110 billion cubic meters. That pipeline is well received by much of the German industry, which wants all the cheapest gas possible.

Last month Trump, who is pressuring Germany to buy more liquefied natural gas in the United States, accused Germany of being "a prisoner" of Russia due to its energy dependence, an allegation Germany denies.

Data from the BAFA, the state foreign trade authority, showed that, in the first half of 2018, Germany imported about 39% of its gas from Russia.

Merkel discussed energy during talks with Russian President Vladimir Putin at a building outside Berlin over the weekend and will also travel to Georgia and Armenia starting Thursday. On Saturday he will hold talks with Azerbaijani President Ilham Aliyev.

 

Germany: After Trump's attack on energy ties with Russia, Merkel begins to take an interest in Azerbaijani gas

| Economics, PRP Channel |