It is reported that two EU members, Romania and Hungary, have joined forces with Azerbaijan and Georgia around a project to ship liquefied Azeri gas to their region. Supporters argue that the project could be implemented quickly, but critics point to high costs and vulnerability.

The state owned energy companies from Azerbaijan, Georgia and Romania have signed a memorandum of understanding on September 14th 2010 in Baku to launch the Azerbaijan Georgia Romania Interconnector project. A new company has been created with the initial task of organizing a feasibility study and attracting funds.

An AGRI summit took place later on in the presence of Azerbaijan President Mr Ilham Aliyev, Georgia's Mr Mikhail Saakashvili, Romania's Mr Traian Basescu and Hungarian Prime Minister Mr Viktor Orban.

On September 20th 2010, Hungary announced it could become a shareholder in AGRI. In that case, each country would hold a 25% stake in the project.

According to reports, AGRI will be designed to transport Azerbaijani gas by pipeline to a Black Sea port in Georgia for liquefaction. Further transport will take place via tanker to the Romanian Black Sea port of Constanta. From there, the gas will be pumped through Romania's pipeline system to Hungary and on to the rest of the European market. The project envisages the construction of a liquefaction plant for LNG exports at the Azerbaijan owned oil export terminal of Kulevi in Georgia, as well as the construction of a terminal for importing liquefied gas to a re gasification plant in Romania.

Mr Aliyev was quoted as saying at the summit that "We're making history."

Mr Aliev explained that the host of the AGRI summit said that diversification was an important element in energy security and that Azerbaijan today had seven oil and gas pipelines running to different destinations. Azerbaijan will produce 28 billion cubic meters of gas per year when the second phase of the Shah Deniz field comes on stream, while domestic demand is 10 billion cubic meters to 11 billion cubic meters. The remaining gas will be exported.

According to analysts Mr Ariel Cohen and Mr Gulmira Rzayeva, AGRI's main selling point is the speed at which it can be implemented, allowing the swift conversion of ideas into reality. They claim that AGRI's realization appears to be the fastest among the projects of the southern corridor, which includes other projects such as Nabucco, the Trans Adriatic Pipeline and the Turkey Greece Italy Interconnector.

(Sourced from EurActiv)