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In the pipeline

January 13, 2011

Azerbaijan and the European Union have signed a deal for long-term gas supplies to the EU. The agreement is to help establish a southern gas corridor decreasing European dependency on Russian gas.

Gas pipeline
The pipelines to ship the gas still need to be buildImage: AP

The European Union on Thursday signed a major deal to import natural gas from Azerbaijan. The move is considered a significant step toward curbing Europe's reliance on Russia.

"This is a major breakthrough," European Commission President Jose Manuel Barroso said in a statement after signing the deal with Azeri President Ilham Aliyev.

"This new supply route will enhance the energy security of European consumers and businesses."

The deal is a major step towards the realization of what's been termed the Southern Gas Corridor, a system of several pipelines to bring Caspian Sea and Middle Eastern gas to Europe.

"This corridor is in our shared strategic interest," Barroso said. "Azerbaijan wants to diversify its exports as much as the EU wants to diversify its imports."

Diversification for the sake of energy security

The Southern Gas Corridor is seen as crucial to future energy security after repeated disruptions of Russian gas supplies mainly due to price disputes between Russia and smaller transit countries that the EU has little influence over.

The deal signed in Baku states the former Soviet republic Azerbaijan will be "substantial contributor" without specifying the exact volume of gas to be supplied.

"As gas imports increase in the decades to come, we need new supplier countries, Azerbaijan foremost amongst them, in addition to our established partners," EU Commissioner for Energy Günther Öttinger said in Baku.

Turkmenistan has also expressed interest in selling gas to the European Union but Brussels still faces competition from Russia and China who both also push for tapping into central Asia's gas resources.

Author: Andreas Illmer (dpa, AFP, Reuters)
Editor: Rob Turner