Thursday, August 12, 2010

Georgian Pipeline to Azerbaijan?

Gazprom might not be the winner in the competition to acquire the main North-South pipeline in Georgia, afterall. This blog reported last week that the Georgian government was putting the pipeline up for sale, and speculated that the cash rich Russian pipeline company might purchase the asset. According to the Turkish newspaper Hurriyet, "observers in Tblisi say the new owner of the pipeline is 99 percent likely to be SOCAR." The deal apparently has been under discussion at the presidential level between Azerbaijan's Ilham Aliyev and Georgia's Mikheil Saakashvili for at least a month, according to Oil and Gas Eurasia (09 August 2010).

Such a development could change the politics of the Nagorno-Karabagh dispute. The Georgian North-South pipeline is the major source of Russian natural gas for Armenia, lying to the South of Georgia. Azerbaijan would have the ability to use access to the natural gas to bring pressure on Armenia to achieve a solution to this two decade-old conflict.

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