(MENAFN- AzerNews)
By Zara Araz
In the realm of energy geopolitics, Azerbaijan's recent
experience with natural gas imports from Turkmenistan highlights
significant economic and strategic developments. According to
recent data, Azerbaijan's import of Natural gas from Turkmenistan
plummeted by a staggering 49% in the first five months of 2024
compared to the same period last year. This decline underscores
pivotal changes in both pricing dynamics and strategic
considerations for Azerbaijan.
Between January and May 2024, Azerbaijan imported 294.8 million
cubic metres of natural gas from Turkmenistan, amounting to a total
payment of 44.2 million US dollars. This starkly contrasts with the
corresponding period in 2023, when Turkmenistan supplied 583.5
million cubic metres and Azerbaijan paid 86.9 million dollars. The
sharp decrease in both volume and expenditure signals a significant
reevaluation of energy procurement strategies by Azerbaijan.
Azerbaijan's natural gas imports from Turkmenistan are
facilitated through Iran, where Turkmenistan exports gas that is
then transferred to Azerbaijan based on an exchange agreement
established in Ashgabat in November 2021. This strategic framework,
involving three regional players, highlights the intricate
geopolitical balancing act in the Caspian region, with energy
security and supply reliability at its core.
Initially agreed upon to supply 1.5-2 billion cubic metres
annually, the gas transportation from Turkmenistan to Azerbaijan
via Iran saw operational adjustments, increasing from 5-6 million
cubic metres per day in early 2022 to 7 million cubic metres per
day by March that year. Subsequent negotiations in June 2022 led to
a doubling of annual gas supplies, further cementing the strategic
ties between Iran and Azerbaijan in energy cooperation.
The economic landscape further reveals a fluctuating price
scenario. Until December 2022, Azerbaijan purchased natural gas
from Turkmenistan at $140 per 1,000 cubic metres. However, by May
2024, this price had escalated to $150 per 1,000 cubic metres. This
upward trend in procurement costs is compounded by contrasting
market conditions, particularly in Europe, where natural gas prices
have shown a marked decline, significantly impacting Azerbaijan's
revenue. In the first five months of 2023, Azerbaijan realised an
average income of $759 per 1,000 cubic metres, contrasting starkly
with a reduced $348 per 1,000 cubic metres in the corresponding
period of 2024.
Looking ahead, Azerbaijan faces critical decisions regarding its
energy-sourcing strategies and economic resilience amidst volatile
global energy markets. The decline in natural gas imports from
Turkmenistan prompts a reassessment of energy diversification
policies and potential shifts towards more cost-effective and
stable sources.
In conclusion, Azerbaijan's recent downturn in natural gas
imports from Turkmenistan underscores broader economic and
strategic recalibrations within the region's energy dynamics. As
global energy landscapes continue to evolve, Azerbaijan's adaptive
strategies will be pivotal in navigating uncertainties and
optimising its energy security and economic stability.
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