WNAM REPORT: President Ilham Aliyev, in his extensive speech at the 2nd Shusha Global Forum, themed “Unmasking False Narratives: Confronting Disinformation,” confirmed ongoing discussions with Ukraine, the EU, and Russia to continue gas supply. These discussions, crucial for European energy security, could provide a reliable alternative to the current gas supply dynamics. Ukrainian President Volodymyr Zelenskiy aims to secure Azerbaijani gas to maintain Ukraine’s role in gas transit and support Western energy security. The five-year deal on Russian gas transit to Europe between Moscow and Kyiv expires after Dec. 31, 2024. Aliyev reiterated that the European Union and Ukraine have asked Azerbaijan to help facilitate the deal, underscoring the strategic importance of Azerbaijan’s gas supply in maintaining European energy security.
Dr. Frank Musmar reminded that Azerbaijan, in response to the global energy crisis sparked by Russia’s invasion of Ukraine in early 2022 and the subsequent Western sanctions, has adjusted its plans to export gas to Europe to as much as 20 Bcm by this year.
“Azerbaijan’s gas exports to the EU have risen significantly since 2021. However, the country’s pledge to double gas flows to the bloc by 2027 is expected to face constraints due to infrastructure capacity and rising domestic consumption. These challenges could potentially slow down the increasing gas flow to the EU. Accordingly, Investment will be necessary to upgrade Azerbaijan’s gas infrastructure and increase production, which could prove difficult as the EU favors renewables and higher volumes of liquefied natural gas (LNG).”
He added that Europe faces a natural gas crisis due to the weaning off of Russia’s supplies due to the war in Ukraine.
“The bloc countries sought new suppliers to diversify their energy resources. These searches raised interest in Azerbaijan as an alternative source, as it is one of the stakeholders in the 3,500-kilometer-long Southern Gas Corridor that extends from Baku to Europe via Georgia and Türkiye.”
Dr. Musmar highlighted that the EU and Azerbaijan signed a Memorandum of Understanding (MoU) for a strategic partnership in energy on July 18, 2022.
“The MoU outlines various aspects of the partnership, including the volume of gas supplied, the timeline for expanding the export base, and the mutual commitments for infrastructure development. Azerbaijan, which has historically exported natural gas only to Georgia and Türkiye, extended its export base to seven countries with the addition of five European nations. This expansion diversifies Azerbaijan’s market and strengthens its position as a critical player in the European gas market. EU leaders describe Azerbaijan, which exports 50% of its natural gas to Europe, as a “reliable partner” and “pan-European gas supplier.”
International expert also pointed out Azerbaijan currently exports natural gas to Italy, Greece, Bulgaria, Romania, and Hungary.
“However, the potential for future sales to Serbia, Albania, Bosnia and Herzegovina, Montenegro, Croatia, Slovakia, and North Macedonia is not just promising, it’s a beacon of hope for Azerbaijan’s role in the European gas market. This expansion offers a hopeful outlook and instills optimism in the audience about the country’s expanding influence.
Since Dec. 31, 2020, Azerbaijan has demonstrated its stability and dependability as a natural gas supplier in the European market. The EU’s confidence in Azerbaijan as a supplier is gradually growing due to its significant gas reserves, strategic location for gas transit, and commitment to investing in pipeline infrastructure. The country’s natural gas exports will only increase further with the start of operations at the Absheron, Babek, and Garabagh deposits and increased production from the Umid deposit. The country has pivoted from oil to natural gas in production and exports. Based on its sufficient natural gas reserves, experts believe the 21st century will be the century of natural gas for Azerbaijan. Thanks to Azerbaijan’s timely investments in building oil and gas pipelines, oil and natural gas from other Caspian countries can be transited via Azerbaijan.”
“Oil transit revenues from other Caspian countries, such as Kazakhstan and Turkmenistan, would cover the country’s fall in oil production. In the future, Turkmenistan’s abundant natural gas resources will be extracted and transported to Europe via Azerbaijan and Türkiye,” Dr.Frank Musmar concluded.
