Our Analytics 23 february — 14:07

European market is waiting for Azerbaijani gas, and Russian... (Our agenda)



Europe is a rich gas market in all respects where many countries compete today from all four sides of the world. But natural gas fields in the north are being depleted, liquefied gas from other countries, including the USA, is expensive, and it also requires additional and expensive coastal facilities. Therefore, today gas dominating there comes from Russia via pipelines. And recently, two major projects of Moscow to deliver its natural gas to the EU countries from the north and south (instead of the tested transit route through Ukraine) are met with fierce resistance from certain circles in the West, which puts their implementation into question, despite the high costs. At the same time, another gas pipeline, originating from Azerbaijan, is steadily advancing to the south of Europe.

And nobody objects to this gas pipeline in the West; on the contrary, it enjoys full support both in Europe and in the USA - an ardent opponent of both Russian gas pipelines. This was again proved during the fifth ministerial meeting held the other day within the framework of the Consultative Council of the Southern Gas Corridor (SGC). This gas pipeline is being built in full compliance with the energy standards of the European Union and will help European consumers to diversify the sources of natural gas. But for Azerbaijan, as President Ilham Aliyev noted in his speech at the meeting, it is also a project of energy diversification. According to the head of state, the diversification of energy resources is very important for both producing countries and consumers and transit countries. In this respect, a good balance was found between Baku, as a producer, and consumer states and transit countries. A balance of interests determines the success of this project.

Yes, the Southern Gas Corridor is an energy diversification project, as it also diversifies transport routes and sources. Azerbaijan is a new source from the point of view of the transportation of energy resources to Europe, but by building new pipelines, energy routes are also diversifying at the same time. That is, we are talking about complete diversification: in fact, it changes the energy map of Europe, and, thus, the value of the Southern Gas Corridor increases.

Along with this, the head of state believes that SGK is a project of energy security, without which ensuring national security is complicated. Energy security is an integral part of the national security of any state.

States dependent on external energy sources should be confident that this route will be sustainable and long-term. At the same time, producer states cannot achieve their goals without reliable markets. Thus, it is a project of energy security, energy diversification and broad international cooperation. And therefore, SGC is a mutually significant project, reflecting the common interests of all project participants. This is an integral part of the energy strategy of Azerbaijan, the foundation of which was laid in 1994. And since then, the energy sector has been and will continue to be the leading sector of the economy of Azerbaijan and one of the important components of regional cooperation.

As for the natural gas resources of Azerbaijan, our confirmed reserves are 2.6 trillion cubic metres: in this way the head of state reacted to the doubts of those who always grumble, they say, your gas will not be enough to fill the pipe. Of course, Shah Deniz is the main, most powerful gas field in the country, but there are others that are currently in operation. So, we can confidently say that gas production at the Absheron field will soon begin. Umid, Babek and other fields with large gas reserves are very encouraging. Therefore, the head of state assured the meeting participants that Shah Deniz would not be the only source of resources for the Southern Gas Corridor. And the more gas will be produced in our fields, the greater will be the potential for supplying our partners and diversifying the supply chain, which Baku has been talking about for a long time.

Günther Oettinger

Günther Oettinger, Commissioner for Budget and Human Resources, spoke about the strategic nature of the project for the EU too. Using the example of the Netherlands, he noted that gas volumes in Europe are decreasing every year. Therefore, it is necessary to diversify the gas supply market, and SGC is a new strategically important route. In the next ten years, it is planned to increase the volume of gas supplied to Europe via SGC twice - up to 20-25 billion cubic metres. And the signing of a comprehensive agreement will strengthen Baku's mutually beneficial partnership with Brussels. Not by chance, interest in the project is growing literally before our eyes. At the ministerial meeting of the Consultative Council, the number of participants in the SGC reached seventeen. For the first time, Serbia, Hungary and San Marino took part in the meeting. This is understandable, work on the Trans-Adriatic Gas Pipeline (TAP) has already been completed by as much as 85% today. Almost a year later, Azerbaijani gas will flow to Europe, and those who want to receive it should hurry. Meanwhile, negotiations are continuing on connecting gas from other countries to our pipeline, which will allow it to fully compete on the European market with Russian gas pipelines. So our pipeline will be the focus of attention of the gas market participants for a long time.

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