Insurance Insight: JLT warns gas pipeline increases risks in Azerbaijan

The development of Trans-Anatolian gas pipeline in Azerbaijan could lead to an escalation of tension according to a report by JLT.

The report focuses on Azerbaijan's oil and gas sector, including a detailed analysis into the resource rich country's increasing influence and the importance of the Trans-Anatolian Gas Pipeline predicted to challenge Russia's dominance of the European energy market.

The World Risk Review report details the strategic importance of TANAP - which will transit gas from Azerbaijan's Shaz Deniz field to Turkey and European markets beyond - including the political and logistical impact on the Nabucco and South Stream pipelines. 

It also assesses regional tensions and the likelihood of disruption from Armenia and Russia.

Elizabeth Stephens, head of credit and political risk analysis for JLT, commented: "TANAP poses a threat to the viability of Russia's South Stream project (as well as the Europe led Nabucco) and will elevate Azerbaijan's influence as a European gas supplier.

"An escalation of tension is possible if Moscow considers Baku to be over-reaching itself and jeopardising Russian revenue streams and the political leverage it wields through its control of a substantial proportion of European energy supplies."  MORE