Oiling Europe’s Wheels: Azerbaijan’s $45 bn Southern Gas Corridor in Focus

Written by | Tuesday, February 7th, 2017

Azerbaijani President Ilham Aliyev met with European leaders in Brussels yesterday (6 February) – EU President Donald Tusk welcomed Mr. Aliyev in Europe’s capital, saying that Azerbaijan is an important partner for the European Union. He reiterated that the EU supported Azerbaijan’s independence, sovereignty and territorial integrity and that the bloc wanted to build on the mutual strategic partnership in the energy sector. Azerbaijan is crucial for Europe’s energy security and the diversification of supplies and the finalization of the Southern Gas Corridor, a complex gas value chain stretching over 3,500 km crossing seven countries and involving more than a dozen major energy companies, is currently a key priority for both sides. The project represents a total investment of approximately US$45 billion.

The EU is Azerbaijan’s main trading partner and one of its most important investors. Brussels seeks to expand these commercial relations further in the upcoming years and Mr. Tusk and Mr. Aliyev discussed how the intensified cooperation would help modernize and diversify the Azerbaijani economy. The EU also supports Azerbaijan’s bid to become a member of the World Trade Organization, which would pave the way for a competitive business environment that would drive economic integration. However, EU President Tusk did not forget to raise the topic of human rights and fundamental freedoms, which the EU believes are the best guarantee for long-term stability and prosperity.

EU-Azerbaijan relations that date back to 1991 are based on a partnership and cooperation agreement, which provides for wide-ranging cooperation in the areas of political dialogue trade, investment, economic matters, legislation and culture. Since then, the European Union has gradually expanded the scope of its cooperation with Azerbaijan and in 2003 it appointed a Special Representative for the South Caucasus. Since 2004, Azerbaijan has been part of the European Neighborhood Policy (ENP), and also of the Eastern Partnership initiative.


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