Malta and Azerbaijan yesterday signed a memorandum of understanding on strategic cooperation in the oil and gas sector.
The agreement was signed with SOCAR – the Azerbaijani oil and gas state agency – by Energy Minister Konrad Mizzi during a three-day official visit together with Prime Minister Joseph Muscat in Baku.
Details on the agreement are still scarce. However, according to a government statement, the main areas of the strategic cooperation between the two countries will focus on oil and gas exploration, sourcing and logistics of petroleum products, trading in energy commodities in the Mediterranean region, development of new regional infrastructure, and innovative LNG (Liquid Natural Gas) services.
Diplomatic relations between the two countries have been stepped up in the past year, following investment by SOCAR in Malta.
The Azerbaijani state entity is a partner in the Electrogas consortium – chosen by Enemalta to build a new gas fired power plant and to supply energy to the Maltese electricity grid for 18 years.
According to Electrogas, SOCAR will be responsible for the supply of LNG to fire the power plant. Since no natural gas pipeline is available, SOCAR will be transporting LNG through its tankers and will be storing the commodity in a fixed offshore LNG tanker to be berthed at Marsaxlokk harbour.
According to latest details given by the government, the new gas-fired power plant is to start providing energy by June 2016. During his visit in Baku, Dr Muscat also held discussions with Azerbaijani President Ilham Alijev. According to Azernews – the main English newspaper in Baku – President Alijev and Dr Muscat discussed investment opportunities in both countries, particularly in the commerce, energy, transport and tourism sectors. They also discussed cooperation in the Mediterranean Sea.
President Alijev said political relationships between Malta and Azerbaijan should yield practical results, and he emphasised the need that the two countries continue to develop relations within the EU context.
Dr Muscat said that Azerbaijan is turning into an important trade partner for Malta, noting that the MOU signed between the two countries creates good conditions for expanding cooperation.
No Maltese media are accompanying the Prime Minister during his official visit to Baku.
The oil and gas rich state gained independence from the Soviet Union in 1991 amid political turmoil.
The current President, Ilham Aliyev, took over from his father, Heydar, in 2003, following elections that were criticised heavily by Western observers, which they said had been marred by voter intimidation, violence and media bias.
Despite its dubious record on human rights and corruption, the Azerbaijan government has nonetheless been successful in courting Western governments.
In December last year, former British Foreign Secretary William Hague visited Baku to witness the signing of an investment deal for a new gas development led by the British oil giant BP, which consolidated the UK’s position as the largest foreign investor in Azerbaijan.