In late 2006, Azerbaijan began a swap deal with the Islamic Republic of Iran to provide natural gas through the Baku-Astara pipeline to Iran, while Iran supplied natural gas to Azerbaijan’s geographically separate Nakhchivan exclave. Iran receives a 15% commission on transit fees. In 2009, the State Oil Company of Azerbaijan (SOCAR) and the National Iranian Gas Company signed a memorandum according to which Azerbaijan supplied 500 bcm of natural gas per year starting from 2010. So, the gas supply from Iran to the region was ensured as a swap deal.
Annual natural gas consumption of Azerbaijan’s exclave is close to half a billion cubic meters. As a natural gas supply via Iran was not stable and reliable, Azerbaijan urgently needed to ensure the energy security of Nakhchivan. Towards this end, Baku and Ankara signed a memorandum of understanding in December 2020 to build the Ighdir-Nakhchivan gas pipeline to ensure the region’s energy security. The pipeline stretches 97.5 kilometers from Iğdır to the Sadarak district. The Azerbaijani section of the pipeline is 17.5 kilometers long, while the Turkish section is 80 kilometers. The pipeline has a capacity of 2 million cubic meters of gas per day and 730 million cubic meters per year, which will fully meet Nakhchivan’s gas needs.
It is worth noting that Türkiye and Azerbaijan are allies and strategic partners, cooperating closely on many global and regional issues, including energy security. These two states are also increasingly positioning themselves as a bridge between Central Asia and Europe in the framework of the Organization of Turkic States (OTS).
The reliable transit countries are very crucial to ensure long-term energy security, and Baku and Ankara established a close energy partnership by supporting important trans-regional energy projects such as the Baku-Tbilisi-Ceyhan (BTC) oil pipeline and the Sothern Gas Corridor. Türkiye and Azerbaijan enabled the supply of the Capsian oil and natural gas directly to global energy markets. Moreover, the two states support connectivity in the region, which is an important link between Central Asia, the Caspian region and Europe.
Analyzing the partnership between two countries, one can underline that energy is one of the key areas of cooperation. Igdir-Nakhchivan Gas Pipeline is another successful energy project together with the abovementioned energy projects. Especially, the Turkish segment of the Sothern Gas Corridor – the Trans-Anatolian Natural Gas Pipeline (TANAP) played an important role in the diversification of energy supplies and routes. The project enabled Türkiye to meet both growing natural gas demand and become a transit country. Most importantly, TANAP supported the construction of the Igdir-Nakhchivan Gas Pipeline which is highly important for Azerbaijan from a geopolitical and economic standpoint.
The gas flow via the Igdir-Nakhchivan Gas Pipeline is planned to commence soon. According to Fahrettin Altun, Head of Communications, Republic of Türkiye – “On the occasion of the visit of President Ilham Aliyev to Türkiye, a live connection will be carried out for the opening ceremony of the Igdir-Nakhchivan Natural Gas Pipeline, which was jointly initiated by President Erdogan and Azerbaijan’s President Ilham Aliyev on Sep. 25, 2023”. This project will change the energy map of the region because the pipeline will ensure the energy security of Nakhchivan by providing a reliable source of natural gas supply and eliminating the region’s energy dependence on the Islamic Republic.
Currently, Azerbaijan supplies natural gas to Türkiye, and in January-November 2024, the country exported a total of 10.44 bcm of natural gas to the Turkish energy market, 12.3% more compared to the eleven months of 2023, according to the Turkish Energy Market Regulatory Authority. Moreover, Azerbaijan became the second-largest natural gas exporter to Türkiye in November, accounting for 16.7% of Türkiye’s total natural gas imports. On the one hand, Azerbaijan has become one of the major gas suppliers to Türkiye, on the other hand, energy projects turn Türkiye into a regional energy hub and increase its geopolitical importance.
Another important milestone in Türkiye-Azerbaijan cooperation in Nakhchivan region is opportunities in the production and export of alternative and renewable energy sources. Nakchivan AR has huge potential to develop renewable energy sources, and the government is interested in attracting investments to develop this sector. During the 3rd Azerbaijan-Türkiye Energy Forum and Nakhchivan-Green Energy Zone International Conference in Nakhchivan in 2023, the parties agreed on cooperation in implementing the projects on renewable energy sources in the territory of the Republic of Azerbaijan, investigating the possibilities of building a transmission network to export the power to Türkiye.
In this sense, from January through August 2024, Nakhchivan achieved a significant milestone with 55% of its total electricity production coming from renewable energy sources. The breakdown of electricity production for this period shows that 45% was generated by Thermal Power Stations, 42% by Hydroelectric Power Stations, and 13% by Solar Power Stations, and all of which were transferred to the grid. Supply of natural gas to Nakhchivan region through Türkiye, and the future supply of green energy from Nakhchivan to Türkiye will support the regional energy market and economic integration.
In conclusion, Azerbaijan and Türkiye are committed to increasing energy cooperation to support each other’s energy security. Two countries will continue to play a crucial role in ensuring global energy and connectivity security. This model of partnership should be an ideal example for other regional states for sustainable peace and economic integration.
Shahmar Hajiyev
