President Aliyev: Opening of Southern Gas Corridor - timely and wise step

Marking the opening ceremony of the Southern Gas Corridor today, on this historic day, we see how timely and wise this step is, Azerbaijani President Ilham Aliyev said.

He made the remarks in Baku May 29 at the ceremony of commissioning the first stage of the Southern Gas Corridor project, which implies the supply of Azerbaijani gas to Europe.

"Azerbaijan’s successful oil and gas policy shows that the Azerbaijani people are able to use their natural resources only in conditions of independence," the president said.

“The oil history in the world originates from Azerbaijan,” President Aliyev said. “In 1846, for the first time ever, oil was extracted through an industrial method in Azerbaijan, in Baku.”

"The monument in honor of this historic event was erected several years ago in the center of our city,” he added. “Azerbaijan ensured most of the world's oil production during that period in the second half of the 19th century and the beginning of the 20th century."

"But could Azerbaijani people benefit from this? Of course not. It's enough to look at the pictures and statistics of that time, to see that people lived in poverty. There was no industrial development whatsoever. Azerbaijan was only a resource, and the "black gold" extracted from the country's depths didn't serve the development of the Azerbaijani people. Our oil resources were getting drained. The oil revenues were not directed towards welfare of Azerbaijani people," said Ilham Aliyev.

"At the same time, we faced big environmental problems in the Absheron peninsula. Today, these problems are being solved by independent Azerbaijan. Today, independent Azerbaijan and our successful oil and gas policy show that only in conditions of independence, during the period of independence, Azerbaijani people can use their natural resources,” President Aliyev added. “Azerbaijan can successfully develop only in conditions of independence.”

"Today, as an independent country, we stand firmly, and successfully fulfill all the tasks set before the country. Such giant projects we realize together with our partners, and re-create the energy map of Europe," said the president.

Ilham Aliyev reminded that the term of "The Contract of the Century", signed 24 years ago, was extended in 2017 until 2050.

"This proves that there are big oil reserves in this field. "The Contract of the Century" breathed life into Azerbaijan, and served the country's revival. For the first time, the Caspian Sea opened up and became available to foreign companies," said President Aliyev.

He went on to note that today, the implementation of "The Contract of the Century" goes on very well, and after the signing of this contract, Azerbaijan's new oil strategy began to take shape.

"I remember those historical days very well, because as vice-president of the State Oil Company I was directly involved in this work. At the time, Azerbaijan's oil strategy was established, and today we see the results of this strategy and the work implemented. After 1994, the second big contract on Shah Deniz gas field was signed. I must note that this contract was signed in early June 1996, exactly on the opening day of the "Caspian Oil and Gas" exhibition. Thus, Azerbaijan presented itself to the world not just as an oil but as a gas country as well," said Ilham Aliyev.

"I also remember well that during that period the gas factor did not play such a significant role in energy security in the world. Even the development of gas fields didn't get much of interest, because compared to oil fields, the revenues were lower. Thus, attracting investors to this project wasn't so easy," he said.

President Aliyev went on to say that in 1997 as a result of "The Contract of the Century" first oil was extracted from the Chirag platform.

"It was really a historic day. For the first time, foreign companies extracted oil from a new field in the Caspian Sea," said the president. "Today, marking the opening ceremony of the Southern Gas Corridor, we see how timely and wise this step is. The Shah Deniz gas field is the main resource base of the Southern Gas Corridor."

Ilham Aliyev added that Azerbaijan is a country with no access to the high seas.

“Therefore, oil pipelines must have been built, and the first oil pipeline, Baku-Supsa, was commissioned in 1999,” he said. “It shows that in a short time we carried out this amount of work, and this also requires big financial resources, these projects are also very difficult to implement in technical terms," he said.

"I must say that we didn’t have a lot of money in 1999. The Baku-Tbilisi-Ceyhan oil pipeline was commissioned after this. So, the implementation of these projects really required great efforts and great wisdom. With the launch of the Baku-Supsa oil pipeline, for the first time in history, we linked the Caspian and the Black seas by an oil pipeline. After this, in 2002, expecting big volumes of oil from the Azeri-Chirag field, we laid the foundation of the Baku-Tbilisi-Ceyhan oil pipeline exactly here, on the territory of the Sangachal terminal. It was commissioned in 2006 and serves the Azerbaijani people and all the friendly countries.”

The Azerbaijani president added that presently, not only Azerbaijani oil, but also oil from other countries is transported via the Baku-Tbilisi-Ceyhan oil pipeline.

“Oil produced on the Caspian Sea by other countries, oil produced on the eastern shores of the Caspian Sea is already supplied through this pipeline to global markets, and Azerbaijan demonstrates its capabilities to neighboring countries at the same time as a reliable transit country,” Ilham Aliyev said.

“The Baku-Tbilisi-Erzurum gas pipeline was commissioned in 2007. This is also a very important project, and the development of the Shah Deniz field would have been impossible without this project. Thus, for the first time, in 2007, Azerbaijani gas started to be transported to Georgia and Turkey. I also remember that day very well, I remember the ceremony in Ceyhan very well. When I was heading here today, all these historic moments, those days revived in my memory, and I would like to say once again that all these are truly historic achievements.”

He went on to say that Azerbaijan then started taking steps regarding future development of the Shah Deniz field.

"Of course, we all knew that a gas pipeline was needed to bring large volumes of Azerbaijani gas to global markets, and thus, practical work was launched to create the Southern Gas Corridor. A very serious work was carried out and negotiations were held. Finally, in 2012, Azerbaijan and Turkey signed an agreement on the Trans-Anatolian Natural Gas Pipeline - TANAP, and thus a powerful impetus was given to the implementation of the Southern Gas Corridor.”

The Azerbaijani president noted that the TANAP project is an important part of the Southern Gas Corridor.

“Next month, we will also mark the commissioning of the TANAP project,” he said. “The foundation of the Southern Gas Corridor was laid September 20, 2014, which is also very symbolic, because the Contract of the Century was signed on September 20, 1994, 20 years prior to that. We are celebrating the official opening of this project. This is really a great and historic event. The Southern Gas Corridor is a huge infrastructure project. More than $40 billion has been and is being invested in the implementation of this project.”

President Ilham Aliyev said that Azerbaijan’s proven gas reserves amount to 2.6 trillion cubic meters.

“I am sure that we have resources in much greater volumes, and future exploration and development work will confirm this,” he said. “It would have been impossible to implement these projects without international cooperation. First of all, I would like to note regional cooperation. Azerbaijan, Georgia and Turkey, implementing Baku-Tbilisi-Ceyhan, Baku-Tbilisi-Erzurum and other important projects, including Baku-Tbilisi-Kars project in the transport sector, have already created a very strong format of trilateral regional cooperation. Therefore, joint efforts of these three countries hold a special place in the implementation of these projects.”

President Ilham Aliyev noted that taking this opportunity, he would like to express gratitude to the leadership of Turkey and Georgia for the cooperation.

“I would like to express my gratitude to the government of the US as well, because the US provided us with great support in all the projects, helped us and rendered both political and moral support,” the Azerbaijani president said. “Undoubtedly, these projects require big resources and most of the financial resources is allocated by banks. The US government made great efforts here as well, and we always felt and feel this support in the implementation of Baku-Tbilisi-Ceyhan, Baku-Tbilisi-Erzurum and the Southern Gas Corridor. This support played great role in the implementation of this project. The government of the UK also always supported us. As you know, BP is our main investor in the energy sector. The UK government always supported us in implementing these projects, and we feel this support today. Last month, another contract was signed between BP and SOCAR with the participation of Prime Minister Mrs. May and me in London. This once more reflects our strategic ties.”

President Ilham Aliyev stressed that the EU played a very important role in the implementation of this project. Back in 2011, a joint declaration on the Southern Gas Corridor was signed between the EU and Azerbaijan in Baku, he added.

“During these years, we always felt the support of the EU,” he said. “Upon the initiative of Azerbaijan and the EU, the Southern Gas Corridor Advisory Council meetings have been held annually in Baku for the past four years. Since 2015, the EU has been represented at these meetings at the highest level. The energy sector undoubtedly holds a very big place in the Azerbaijan-EU cooperation format. The implementation of these projects would have been impossible without the funds of financial institutions. At today’s ceremony, I would like to express my gratitude to the world-famous banks that supported us. Having trusted us, they allocated financial resources. We, just like them, are sure that Azerbaijan is a reliable partner which timely returns and will return all of its debts. In short, I am sure that this project being implemented as part of broad international cooperation, will in the future serve to deepening cooperation in Europe and in our region not only in the energy sector, but in all other spheres.”

Ilham Aliyev reminded that seven countries participate in the implementation of the Southern Gas Corridor.

“I would like to name these countries: Azerbaijan, Georgia, Turkey, Bulgaria, Greece, Albania and Italy,” he said. “At the same time, I am confident that the three Balkan countries - Bosnia and Herzegovina, Croatia and Montenegro will join this project as partners at the next stage. The Southern Gas Corridor should have branches. We want to expand our export opportunities, and we know that there is necessity for Azerbaijani gas in Europe. We want to sell more gas to Europe, because the European market is the most profitable one for us.”