Azerbaijan on track to double gas exports to EU, start green energy supply

Azerbaijan plans to double natural gas exports by 2027, according to the agreement on cooperation with the European Union, while the first steps are being made to start exporting green energy to European countries. These are some of the main takeaways from the 9th ministerial meeting of the Southern Gas Corridor Advisory Council.

The meeting held in Baku was attended by representatives of the EU, Albania, Bulgaria, Croatia, Georgia, Britain, Greece, Italy, Hungary, Moldova, Montenegro, Romania, Serbia, Turkey, Ukraine, and the United States. The EU was represented by Energy Commissioner Kadri Simson.

The Southern Gas Corridor was launched as a tool to diversify Europe’s supply of natural gas. With the beginning of the energy crisis and after the outbreak of the war in Ukraine, the route’s importance grew bigger. Additionally, the possibility emerged to supply Europe with green electricity from wind farms and solar power plants in Azerbaijan.

Aliyev: Exports increased from 19 to 22.6 billion cubic meters in just a year

Speaking at the ministerial meeting, President of Azerbaijan Ilham Aliyev said his country would double gas exports by 2027, as agreed in the Memorandum of Understanding on a Strategic Partnership in the Field of Energy with the EU, signed last year.

Natural gas exports from Azerbaijan are growing, he added. The volume was at 19 billion cubic meters in 2021, last year it reached 22.6 billion, and this year it is expected to be 24.5 billion, in Aliyev’s words.

EU: Imports from Azerbaijan have increased by 40%

According to the EU, at the height of the energy crisis last year, the Southern Gas Corridor proved to be a crucial source of piped gas supply, with deliveries increasing by more than 40% year on year in 2022 to 11.4 billion cubic meters.

Aliyev claimed Azerbaijan’s natural gas reserves are sufficient for domestic needs and its partners for at least another 100 years and that new fields would be put into operation this year. He said deliveries to Romania would start very soon.

In Southeastern Europe, Bulgaria and Serbia also look to Azerbaijan for diversifying gas supply. Bulgaria has finished an interconnector with Greece, so now it has the technical conditions to increase imports, while Serbia is building a pipeline with Bulgaria for such an option.

The Southern Gas Corridor connects Azerbaijan with Italy. It consists of the South Caucasus Pipeline (SCP), the Trans Anatolian Natural Gas Pipeline (TANAP), and the Trans Adriatic Pipeline (TAP).

Bulgaria is connected with TAP via the Interconnector Greece-Bulgaria (IGB).

Preparations have started for laying a power cable along the bottom of the Black Sea

In addition to natural gas, the EU is also interested in electricity from renewables. Baku has also hosted one of the first meetings of the steering committee of the Agreement on Strategic Partnership in the field of Green Energy Development and Transmission between the governments of Azerbaijan, Georgia, Hungary and Romania. It was signed last year in December.

The idea is to build a transmission line from Azerbaijan to Georgia, and an undersea power link between Georgia and Romania after that. Of note, Serbia is also interested in using the link to import electricity.

President Aliyev noted that his country has signed memoranda of understanding with three companies for the construction of wind farms and solar power plants with an overall capacity of nearly 25 GW. The agreement with Fortescue is for projects of 12 GW in total, against 10 GW with Masdar and 2.5 GW with ACWA.

Aliyev said the Black Sea cable should be planned in stages and coordinated with the demand in Europe. “I am sure Romania and Hungary will not be the final destination for green energy,” he added.

The green energy potential of Azerbaijan, in his words, is 157 GW in wind and 27 GW in solar power.

Montenegro and Serbia rely on Azerbaijan

Serbian Minister of Mining and Energy Dubravka Đedović said her country intends to finish the construction of a gas interconnection with Bulgaria by autumn. It will enable gas supply from Azerbaijan, the Caspian region, and terminals for liquid natural gas in Greece.

Serbia expects the first gas deliveries at the beginning of 2024, she added.

Đedović: We will ensure energy security and become a transit country

The minister discussed the quantities and price of gas, the potential construction of gas power plants, and the possibilities for securing electricity imports with Azerbaijani officials.

Gas interconnections will improve Serbia’s energy security, but also create an opportunity to become a transit country for Azerbaijani gas, she added.

Deputy Prime Minister of Montenegro responsible for Regional Development and Minister of Capital Investments Ervin Ibrahimović noted that Albania, Montenegro and Croatia launched an initiative in 2007 to build the Ionian Adriatic Pipeline as an extension of TAP.

Ibrahimović: The concept design for the project is ready

The project is planned to connect the Albanian city of Fier with Split in Croatia via Montenegro.

The gas pipeline would enable a new energy corridor for Southeastern Europe within the Southern Gas Corridor, with the aim of establishing a new direction of natural gas supply from the Middle East and the Caspian region, Ibrahimović added.