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BAKU/MOSCOW/YEREVAN, Sept 28 (Reuters) - Military clashes
between Armenia and Azerbaijan over the territory of
Nagorno-Karabakh have not yet affected energy supplies from the
region, but could disrupt oil and gas exports should the
conflict escalate, analysts said on Monday.
Oil and gas rich Azerbaijan is particularly vulnerable to
any potential energy export disruption, though overseas supplies
are not in close proximity to Nagorno-Karabakh.
Armenia is home to the Metsamor nuclear power station, which
is already in a precarious situation due to earthquake risk.
Yerevan warned in July about security risks to the region.
Baku has also said energy supplies were in danger due to the
conflict.
OIL
Azerbaijan's primary route for oil exports is the
Baku-Tbilisi-Ceyhan pipeline, which accounts for around 80% of
country's oil exports and runs via Georgia and on to the Turkish
Mediterranean coast. It has capacity of 1.2 million barrels per
day, or more than 1% of global oil supplies.
Currently it exports over 0.5 million barrels per day of
oil.
Azerbaijan also exports oil via Russia through the
Baku-Novorossiisk pipeline and via Georgia by rail, as well as
the Baku-Supsa pipeline.
"The Nagorno-Karabakh conflict has concerned the
international community in part because of its threat to
stability in a region that serves as a corridor for major
pipelines taking oil and gas to world markets," OilX consultancy
said in a note.
GAS
Azerbaijan has plans to increase natural gas exports to
Europe.
BP is leading the international consortium developing
Azerbaijan's giant Shah Deniz field, which is expected to make
its first deliveries to Europe later this year.
The Shah Deniz I field, which has been pumping gas since
2006, has production capacity of 8 billion cubic metres (bcm).
Output from Shah Deniz II is expected to reach 16 bcm per year,
with 10 bcm earmarked for Europe and 6 bcm for Turkey.
S&P rating agency told Reuters it regarded the conflict as
"smouldering", without threats to energy supplies for now.
"We will follow the implications for the sovereign finances,
energy flows and companies' liquidity in case of further
escalation of the conflict," it said.
(Reporting by Vladimir Soldatkin and Olesya Astakhova in
Moscow, Nvard Hovhannisyan in Yerevan and Nailia Bagirova in
Baku; editing by David Evans)
