President Aliyev says more gas supplies will reach foreign markets in 2022

President Ilham Aliyev said European energy markets would see more gas flowing from Azerbaijan on the southern gas corridor in 2022 amid market instability that could lead to a volatile energy crisis.

President Aliyev’s remarks were made on Friday at the 8th ministerial meeting of the Southern Gas Corridor (SGC) Advisory Council in the Azerbaijani capital Baku.

“Azerbaijan managed to increase its exports to international markets, including European ones, after the completion of the Southern Gas Corridor. Last year, Azerbaijan’s natural gas export amounted to 19 billion cubic meters, 8.5 to Turkiye, almost 7 billion to Italy and the rest to other members of the team – Georgia, Greece, Bulgaria,” he said, expressing his hope of seeing Albania as one to celebrate new recipient after completing its gas distribution network, reports President.Az.

According to the president, Azerbaijani gas accounts for 20 to 80 percent of total gas consumption in different countries, and the number is growing as Azerbaijan works to increase production of blue energy.

President Aliyev believes that Azerbaijan’s proven gas reserves will allow the country to increase supplies to overseas markets, especially to Europe, which is facing resource shortages. According to official data, Azerbaijan’s proven gas reserves under the Caspian Sea amount to 2.6 trillion cubic meters, of which 1 trillion is reserved in the largest Shah Deniz field. However, the number is likely to increase due to new discoveries.

“Shah Deniz is the most important gas field in Azerbaijan and so far the only contributor to the Southern Gas Corridor, but other projects are also in the works. One of Absheron’s largest gas liquids fields will hopefully be on production very soon, perhaps in less than a year. “Absheron” stage 1 will produce 1.5 billion cubic meters, not a huge amount but I think it’s significant for some countries. Another large field that we are also hoping for good results from is “Babak” with estimated reserves of 400 billion cubic meters. “Umid” at least 200 billion cubic meters. And of course we have great expectations for one of the oldest oil and gas fields, Azeri-Chirag-Gunashli. Its deep gas division, which I hope will soon be operational as well, and which also contains hundreds of billions of cubic meters of gas, I believe can be mined within a short period of time,” President Aliyev added.

Azerbaijan has been supplying natural gas to European markets via the Trans-Adriatic Pipeline (TAP) since December 31, 2020. The TAP begins at the Turkish-Greek border and runs 773 kilometers of onshore and 105 kilometers of offshore routes crossing Greece and Albania with the final destination in Italy.

TAP is now part of the Southern Gas Corridor (SGC) mega-pipeline designed and built to increase and diversify Europe’s energy supply by bringing Caspian natural gas to Europe for the first time. The three-part SGC crosses seven countries and six regulatory regimes, connecting 11 different investors and initially serving 12 multiple gas customers, mainly in Europe. The corridor’s annual transport volume of 16 billion cubic meters will be shared between the countries of Turkey and the European Union, which will receive 6 billion cubic meters and 10 billion cubic meters, respectively.

TAP is recognized as a strategically and economically important energy carrier and is celebrated for providing reliable access to an entirely new source of natural gas for Europe, which is heavily dependent on foreign supplies. The pipeline plays a significant role in promoting Europe’s energy security, supply diversification and decarbonization goals by enabling an uninterrupted flow of Azerbaijani gas from the BP-operated Shah Deniz-2 subsea field.

EU Energy Commissioner Kadri Simson said Azerbaijan’s efforts to increase gas supplies to Europe on the SGC represent “a sensitive moment in terms of the security of EU gas supplies”.

“Reliable, competitive and affordable gas is making its way to South East Europe. Apartments are supplied, buildings are heated and citizens receive the energy they need. And with rising energy prices and tight gas supplies, the corridor’s role is strategic for the EU [European Union]now more than ever,” she said at the ministerial meeting in Baku, adding that the EU is interested in further expanding the capacity and geographic footprint of the SGC.

Simson added that gas would account for up to 22 percent of Europe’s energy mix by 2030, meaning domestic markets would need additional supplies from Azerbaijan via TAP. According to her, the TAP consortium is currently conducting a market test to determine the demand for additional supplies, the result of which will be known by July 2022.

TAP officials believe TAP’s annual throughput capacity could be increased to up to 20 billion cubic meters of gas per year to power more markets in Europe.

In the event of capacity expansion, some Western Balkan countries, including Montenegro, North Macedonia, Bosnia and Herzegovina and Croatia, could also receive Azerbaijani gas. TAP deliveries would be the very first batch of pipeline gas to reach households in Montenegro.

“You have seen the enormous importance of the 8 billion cubic meters of gas that have already (in 2021) been shipped to Europe via Azerbaijan. This winter it has been a very valuable part of our energy mix and I hope we can count on Azerbaijan to bring more of that energy, not only to Europe but also to our neighbors, the Western Balkans,” said Oliver Várhelyi, European Commissioner for Neighborhood and Enlargement, at a press conference after Friday’s meeting in Baku.

The EU plans to deliver 5 billion cubic meters of Azerbaijani gas to the Western Balkans to Bosnia and Herzegovina via the 511-kilometer Ionian Adriatic Pipeline (IAP), which will connect to the TAP in Albania and feed the Croatian network via Montenegro.

The Western Balkans — made up of Albania, Bosnia and Herzegovina, Croatia, North Macedonia, Montenegro and Serbia — have lacked reliable energy infrastructure since the breakup of the former Yugoslavia, which was badly damaged in the wake of conflicts over the country’s breakup.

Most gas imports into the Western Balkans come from Russia. Albania, Montenegro and parts of North Macedonia as well as Bosnia and Herzegovina are not connected to the European gas network. Only Serbia produces gas, which accounts for about 20 to 25 percent of its domestic consumption, according to a report compiled by Jstor, a digital library of scientific journals.

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