Azerbaijan is on target to double its gas exports to Europe by 2027, according to President Ilham Aliyev.
Speaking at the inauguration event for the Bulgaria-Serbia interconnector gas pipeline in Niš, Serbia, on December 10, Aliyev verified that Baku will fulfill its guarantee to Brussels to double its gas exports to Europe to 20 billion cubic meters a year by 2027.
” The numbers currently reveal that we are with confidence moving towards this objective,” Aliyev stated, discussing that Azerbaijan exported simply over 8 billion cubic meters of gas to Europe in 2021 which will increase to “about 12 billion cubic meters” for this year.
” This will represent half of Azerbaijan’s overall gas exports,” he stated.
To double gas exports to Europe, Baku needs to both boost gas production and increase the capability of the 3 transit pipelines that comprise the Southern Gas Passage, which brings Azerbaijani gas from the Caspian Sea to European markets.
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The Southern Gas Passage (Wikimedia Commons)
Azerbaijan’s gas production and exports are both increasing.
Information launched on December 13 reveals production for January-November reaching 44 billion cubic meters, up 3.5 percent on the exact same duration in 2022, with exports over the exact same duration amounting to 22 billion cubic meters, up 9.5 percent.
Some jobs targeted at additional increasing production are underway.
TotalEnergies, which started producing gas from Azerbaijan’s Absheron gas field in July, verified in September that it will raise production from 1.5 billion cubic meters a year to around 5.5 billion cubic meters a year.
On The Other Hand, BP, which runs Azerbaijan’s primary Shah Deniz gas field and ACG oil field has actually started drilling deep wells into what it hopes are significant reserves below both existing fields and Azerbaijan’s state oil business SOCAR has hopes of increasing production from its Umid gas field.
However the substantial financial investment required to bring brand-new gas production online and to broaden the pipelines needs to be stabilized by contracts with gas purchasers in Europe, verifying that they will purchase the gas when it is offered.
To date that hasn’t occurred, with Azerbaijani authorities grumbling that European purchasers have actually been sluggish to dedicate to buying the additional gas that Azerbaijan has actually assured Brussels it will provide by 2027.
Some export contracts have actually been signed.
Next year will see Bulgaria import 1 billion cubic meters of Azerbaijani gas, double the 500 million cubic meters provided this year ¸ while a brand-new arrangement with Belgrade will see SOCAR export 400 million cubic meters of gas to Serbia next year, through the brand-new Bulgaria-Serbia interconnector.
Nevertheless, the significant European gas purchasers additional west have yet to dedicate
It’s unclear why. Azerbaijan’s September military offensive to take Nagorno-Karabakh, which led to the emptying of the area’s Armenian population, was not gotten well by the EU, in specific by some member states like France. There’s been no indicator that this has had an influence on European interest in purchasing Azerbaijani gas, nevertheless. (TotalEnergies, France’s most significant energy business, continues to run its Absheron field.)
In January this year the operator of the Trans Adriatic Pipeline (TAP) which brings Azerbaijani gas from the Turkey-Greece border, through Albania and on to Italy, held an open tender for purchasers to book additional pipeline capability for gas they prepared to import
TAP verified it had actually gotten dedications for just an additional 1.2 billion cubic meters a year, substantially less than the 10 billion cubic meters required to double Azerbaijan’s exports to Europe to 20 billion cu m/yr.
A 2nd tender prepared for later on in 2023 has actually not emerged.
At the exact same time, there has actually been no verification of any work to broaden either the South Caucasus gas Pipeline (SCP) which brings Azerbaijani gas from Azerbaijan to Turkey or the TANAP pipeline which brings the gas throughout Turkey to Greece.
The integrated capability of both will need to be broadened by a minimum of 10 billion cubic meters a year if Baku’s guarantee to double exports to Europe to 20 billion cubic meters a year by 2027 is to be fulfilled.
That guarantee, made in July in 2015 in a landmark arrangement with the European Union, was available in the wake of Russia’s intrusion of Ukraine which has actually seen Russian gas exports to Europe fall to absolutely no and saw European gas costs rise to unmatched levels.
( The political objective of minimizing EU reliance on Russian gas was probably weakened a couple of months later on, when Azerbaijan started buying Russian gas to fulfill its own requirements.)
Consequently, nevertheless, Europe’s gas circumstance has actually reduced with brand-new melted gas (LNG) import terminals being commissioned throughout the continent and significant LNG exporters such as the U.S. and Qatar working to increase exports.
Significantly Azerbaijan’s gas exports, which can just be made through the Southern Gas Passage pipelines, are needing to take on more versatile LNG exports, provided by sea to drifting terminals which can quickly be relocated to various areas according to require.
And with efforts to increase Azerbaijani production to the needed levels still in the early phases, Baku is not able to validate precisely just how much more gas will be offered and when.
Other possibilities
Baku does have some other alternatives which might increase the volume of gas offered for export.
Baku has enthusiastic prepare for eco-friendly power generation, which, if recognized, will significantly lower domestic gas intake.
Speaking in Niš, Aliyev verified that his federal government has actually signed contracts for the advancement of 10 gigawatts of eco-friendly power-generating capability.
Just how much of that will in fact be established, and when, stays to be verified.
Azerbaijan’s most current power generation information, launched on December 15, reveals that 93 percent of the republic’s power is still created by thermal power plants – mainly burning gas, with simply 7 percent originating from renewables.
Another alternative open is for Baku to import more gas to fulfill domestic requirements, permitting it to increase exports, or to transit gas from other nations straight.
Just recently restored interest in the advancement of a pipeline throughout the Caspian to bring gas from Turkmenistan to Europe, currently appears to have actually cooled.
Nevertheless, Azerbaijan’s existing offer under which it imports gas from Turkmenistan through Iran might be additional broadened with Tehran signalling previously this year that it was broadening its pipeline capability in preparedness for additional transit.
That additional pipeline capability might likewise be utilized to provide Turkey.
A current conference in between Turkish and Turkmen authorities led to a contract for the 2 sides to check out the possibility of Turkey likewise importing Turkmen gas through Iran.
If recognized, that might lower Ankara’s reliance on Azerbaijan, which in 2015 provided Turkey with 8.7 billion cubic meters of gas, 16 percent of Turkey’s imports, once again maximizing more Azerbaijani gas for export to Europe.
Nevertheless, such a relocation would likewise need a brand-new arrangement in between Ankara and Tehran over Turkey’s existing offer to import 9.6 billion cubic meters a year of Iranian gas which ends in July 2026.
By David O’Byrne through Eurasianet.org
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