Azerbaijan and Türkiye Sign Energy Contract

Azerbaijan and Türkiye Sign Energy Contract

Executive Summary:

• Azerbaijan and Türkiye signed a 15-year gas agreement on January 4 for the Absheron field starting in 2029, reinforcing Türkiye’s energy diversification strategy and accelerating its ambition to become a regional energy hub.
• The deal reflects deeper Azerbaijan–Türkiye alignment, linking energy cooperation with broader geopolitical goals, including the creation of a Turkic trade corridor positioning Türkiye as the primary gateway between Central Asia and Europe.
• The agreement advances Absheron’s full-scale development while strengthening Azerbaijan’s export diversification and Türkiye’s position in Eurasia’s shifting energy and security architecture.

On January 4, Azerbaijan and Türkiye signed a new 15-year-long energy contract. Thirty-three billion cubic meters (bcm) of Azeri gas will be exported to Türkiye over the 15-year period from the Absheron field in the Caspian Sea, operated by TotalEnergies, with the Azerbaijani State Oil Company (SOCAR) and the United Arab Emirates’ Adnoc as partners in the project. The supply is slated to commence in 2029. Turkish Energy and Natural Resources Minister Alparslan Bayraktar said that Ankara has secured “affordable gas and a long-term supply from Azerbaijan, delivered via pipeline from the Caspian Sea” (Haber 7, January 4; Hurriyet Daily News, January 5). The new contract is just one of numerous projects Türkiye is undertaking as the country continues to advance its energy diversification goals. For example, Ankara is preparing for a deep-sea drilling operation in Somalia for potential new gas fields (Türkiye Today, January 1). In line with this approach, on January 8, the Turkish state energy company, Turkish Petroleum Corporation (TPAO), signed a deal with a unit of U.S. oil and gas giant ExxonMobil, covering new exploration areas in the Black Sea and Mediterranean Sea (X/@aBayraktar1, January 8). These new contracts aim to strengthen Ankara’s institutional capacity through international collaborations and advance its efforts to become an energy hub for the region.

Türkiye’s oil and natural gas production surged in 2025, with oil output rising by 26 percent to 47.9 million barrels and natural gas production increasing by 39 percent to 3.2 billion cubic meters (Türkiye Today, January 7). Bayraktar stated that the country currently imports approximately two-thirds of its energy needs (Turkish Ministry of Energy and Natural Resources, January 7).

Amid the evolving geopolitical realignments across Eurasia, Azerbaijan has consolidated its role as one of Türkiye’s most dependable energy partners. This partnership extends beyond hydrocarbons, as Baku increasingly frames Ankara as a pivotal ally in security, economic integration, and transit connectivity (Eurasianet, January 7). Azerbaijani President Ilham Aliyev’s January 5 interview with local Azerbaijani news outlets emphasized this strategic recalibration. Azerbaijan is now actively advocating for the institutionalization of a Turkic trade corridor (President of Azerbaijan, January 5). Such a corridor would not only channel Central Asia’s resource wealth toward Türkiye but also embed Ankara as the indispensable gateway linking Turkic states to Western markets. This initiative reflects Azerbaijan’s broader vision of leveraging Turkic solidarity to mitigate regional uncertainties, diversify export routes, and reinforce Türkiye’s geoeconomic centrality in Eurasia (see EDM, January 21).

First steps toward establishing this corridor were taken in December 2025, when the five leaders of Central Asian states formally anointed Azerbaijan as a member of the C5 format, turning it into C6 (Eurasianet, January 7; see EDM, January 21). Azerbaijan views Türkiye as a safe gateway for fossil fuel transfers to Europe and as a guarantor of regional energy infrastructure. In 2025, both states inaugurated operations of a new Ighdir–Nakhchivan gas pipeline in March, connecting Azerbaijan’s Nakhchivan exclave to Türkiye’s gas network, and began construction for a new rail link from Türkiye’s city of Kars to the border of Nakhchivan in August (President of Azerbaijan, March 5, 2025; Caspian News, March 6, 2025; see EDM, January 22). The idea of such a corridor is important at this stage, given Russia’s war against Ukraine and the changes it has brought to Eurasia’s security and economic architecture. Azerbaijan is pushing the narrative that Turkic states need to be ready to defend their economic and political interests. 

The recently signed gas supply agreement with Türkiye is expected to be a key driver of the rapid advancement of the Absheron project toward full-scale development. As a result, the presence of this long-term agreement paves the way for a final investment decision on Absheron to be taken as early as the first half of 2026. The Absheron field has the capacity to produce approximately 5–6 bcm of natural gas annually, of which 2.25 bcm will be exported to Türkiye via the Baku–Tbilisi–Erzurum pipeline, while the remaining volumes could potentially be delivered to Europe through the Southern Gas Corridor (Haqqin.az, January 5).

The new gas supply agreement between Türkiye and Azerbaijan secures Ankara with a long-term, affordable energy supply from the Absheron field and symbolizes a deeper strategic alignment between the two states. This partnership intertwines energy cooperation with broader geopolitical ambitions. For Türkiye, the agreement provides additional leverage for energy diversification efforts, while for Azerbaijan, it boosts soft-power diplomacy and gives direct access to the European gas market, consolidating Ankara’s role as a reliable energy partner and advancing the vision of a Turkic trade corridor that channels Central Asia’s resources westward.