BAKU. July 21 (Interfax) - The project to build a Trans-Caspian natural gas pipeline from Turkmenistan is unlikely to be implemented until there is clarity on who will finance it, Azerbaijani President Ilham Aliyev said.
"Expanding our pipeline systems is related to an increase in our own resources. To receive greater volumes of gas from the eastern part of the Caspian Sea, it's definitely necessary to build a Trans-Caspian underwater gas pipeline. Second, it's necessary to create infrastructure [running] from Baku towards Europe, similar to the Southern Gas Corridor [SGC]," Aliyev said in Shusha on Friday.
However, the question arises as to who will finance the project, he said.
"There is no answer to this question yet. So, until there is an answer to this question, I think implementing this project doesn't look very realistic," Aliyev said.
At present, European banks do not finance oil and gas production projects, so finding money will be very difficult, he said.
"When the SGC project was being implemented, we raised funds from the European Bank for [Reconstruction and] Development, the European Investment Bank, the Asian Development Bank, and others. But two European institutions no longer finance such projects; they finance green energy projects," he said.
Aliyev also commented on gas price formation in Europe.
"We are also observing the changes in gas prices in Europe. Moreover, the cap imposed on gas prices is unacceptable. Consumers cap the prices, which is against the principles of the market economy which European countries have been advocates of for years. It means that currently this is a very serious problem. If someone wishes to implement the Trans-Caspian project, we will be glad. We would be paid additional transit fees, and further opportunities for cooperation would be created," Aliyev said.
In March the president said it was unclear who would shoulder the burden of paying for the gas pipeline project. The project is not Azerbaijan's, with the country having only the role of a transit country within it.
In September 2022, Aliyev said that Azerbaijan would back the project's implementation if the Turkmen authorities decide to go ahead with it, but ruled out Baku's role as the initiator. The project was based on Turkmenistan's resources, he said.
Turkmenistan has been in talks with Azerbaijan, Turkey, Georgia and the EU for years over the possibility of building a pipeline with an annual capacity of between 10 billion and 30 billion cubic meters of natural gas. The initiative has long faced opposition from Moscow and Tehran.
However, in August 2018 in Aktau, Kazakhstan, the presidents of Russia, Kazakhstan, Azerbaijan, Turkmenistan and Iran signed a Convention on the legal status of the Caspian Sea. Under the document, laying a pipeline on the Caspian Sea's seabed does not require the consent of all littoral states, but only from those whose territory it would cross. In the case of the Trans-Caspian pipeline, these are Azerbaijan and Turkmenistan.
The pipeline is on the EU's list of Projects of Common Interest.