(MENAFN- AzerNews)
By Trend
The memorandum of understanding signed between the EU and
Azerbaijan on July 18 is a victory for both sides, and especially
for Azerbaijan in terms of being treated as the EU's strategic
partner, the former US ambassador to Azerbaijan, Matthew Bryza told
Trend .
“This latest memorandum of understanding between the EU and
Azerbaijan on strategic energy partnership is quite significant. It
is a broad agreement that reflects and balances the primary
interests of each party and harmonizes them. One of the passages
talks about how the sides promise to work together to ensure stable
and predictable delivery of natural gas to the EU. So that's a key
goal for the EU to get non-Russian natural gas. But then continues
to say in a manner that is consistent with the EU's long-term
decarbonization objectives. So, the EU is saying“we want gas, we
need it now, but over time we want to consume less and less gas,
because we have our decarbonization objectives”. Then it says, it
is based on the long-term partnership between the sides and the
principle of market-oriented pricing. So, market-oriented pricing
is what Azerbaijan really wants. It wants to know that over time it
can rely on prices determined by the energy market rather than by
governments when selling its natural gas. Azerbaijan also wants to
make sure that the EU will indeed continue investing in natural gas
infrastructure, even as if it pursues its decarbonization goals.
That's one important set of points,” he said.
Bryza noted that another important set of points is that the EU
acknowledges that natural gas will continue to play an important
role in its energy consumption and electricity generation until
2030 and that after 2030 the EU will over time replace natural gas
with renewable energy sources with the objective of being carbon
neutral by 2050.
“Again, the EU is offering Azerbaijan assurances that at least
for the next eight years natural gas will be an important part of
the EU's energy mix in terms of consumption, but after the EU will
start to try to decrease its consumption of natural gas. That's a
really important point because in recent months, before the war in
Ukraine, EU looked like it might be preparing to eliminate natural
gas as a source of green energy that would then prevent continued
investment by the EU in natural gas projects. It is now clear that
the EU wants to continue investing in natural gas infrastructure
and buying natural gas. Because obviously, it faces urgent need to
move away from Russian-sourced gas. But again, the EU wants to do
all of this in conjunction with its goals of carbon-neutrality by
2050,” said the former US ambassador.
He went on to add that there are a lot of discussions about
renewable energy and cooperation between the private sector and
public sector companies to develop the technologies and
capabilities to deliver green energy from Azerbaijan to Europe.
“This has been the big goal of Azerbaijan as well to increase
its wind and solar power generation and the potential in Azerbaijan
of course, is enormous for both wind and solar. I know that the
intensity of the sun in southern parts of Karabakh and Nakhchivan
is really high and therefore, creates great potential for solar
power. Of course, everybody knows how sustainable, strong winds are
on the Absheron peninsular, in Baku and elsewhere in Azerbaijan.
This seems to be a really strong area of cooperation now going
forward between the EU and Azerbaijan meaning renewable energy,”
said the former US ambassador.
Bryza pointed out that the primary focus of the MoU is on
delivering more gas via Azerbaijan to the EU now and in the near
future.
“The MoU talks about the joint commitment to expand the Southern
Gas Corridor into perhaps the Western Balkan and it talks about the
EU pledging to continue to find financing for these projects, such
as the expansion of the Southern Gas Corridor. That has been a real
interest of SOCAR. Again, as it seemed like maybe the EU was going
to try to stop consuming and investing in natural gas. So, it is
very important for SOCAR that the EU is saying that it is committed
to investing in expansion of the Southern Gas Corridor. Also,
interesting to me is the mention of possibility of cooperating to
develop electricity links for green energy between Azerbaijan and
under the Black Sea to the EU and also through Nakhchivan. That's
something to keep an eye on,” he added.
Bryza notes that both sides commit to reduce methane emissions,
which means by reducing the amount of natural gas that escapes when
natural gas or oil are produced.
“Some of that natural gas escapes when there is gas associated
with oil production and then that natural gas is either burned or
simply vented into the atmosphere. In this MoU both sides pledge to
capture that gas and use it rather than sending it into the
atmosphere. Natural gas also escapes during pipeline operations and
other ways of natural gas production operations. So the two sides
pledge to cooperate to reduce such emissions in accordance with the
global methane reduction pledge. So, it is a very forward-looking
agreement very balanced between natural gas and renewable energy.
The headline goal where everyone is focusing on in the media is
this pledge of Azerbaijan to provide 20 bcm by 2027. Azerbaijan has
a need to produce more natural gas. Azerbaijan needs to achieve
that production level, to get 10 billion cubic meters more for the
EU. It is going to require a lot of investment in Azerbaijan in new
gas fields. It is going to require trading of natural gas that is
produced by other countries like Turkmenistan with Azerbaijan
serving as a transit country. The MoU says through production and
trade to make sure that the EU can obtain another 10 bcm through
bilateral trade, including exports from Azerbaijan, but not only,”
he explained.
One final point is that the MoU also talks about working
together to protect coastlines and environment in general from
energy production and oil spills.
“I hope that Azerbaijan working with EU can launch a regional
effort in the Caspian Sea to protect the Caspian marine environment
against further oil spills. It has been an enormous amount of
spills from Soviet-era pipelines. EU, Azerbaijan and Turkmenistan
could cooperate on preventing and minimizing negative impact of oil
spills in the Caspian Sea,” Bryza concluded.
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