(MENAFN- AzerNews)
Nazrin Abdul
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The commencement of commercial natural gas production from
Azerbaijan's Caspian Sea sector, particularly the "Absheron"
gas-condensate field, marks a significant advancement in the
nation's energy sector. This development represents a critical step
in diversifying Azerbaijan's economy, which has consistently
demonstrated robust energy security. It highlights the discovery of
substantial new gas reserves, representing the second major find
following the "Shah Deniz" field.
The first phase of the "Absheron" project has already been
approved, with annual production from the field expected to reach
1.5 billion cubic meters. Following an agreement on the second
phase, an additional 4-5 billion cubic meters will be produced,
with most of it destined for international markets.
In 2023, the European Union and Azerbaijan signed a Memorandum
of Understanding on strategic energy partnership, which is being
effectively implemented. According to this memorandum, Azerbaijan
is expected to double its gas exports to Europe by 2027.
Azerbaijan exports natural gas to Europe via the Southern Gas
Corridor. The Trans-Adriatic Pipeline (TAP), which constitutes the
European segment of this corridor, has a transmission capacity of
12 billion cubic meters per year. From January to June 2024,
Azerbaijan exported 6.4 billion cubic meters of natural gas to
Europe, marking a 12.3% increase compared to the same period in the
previous year.
Azerbaijan remains a key alternative source for new gas
imports to Europe.
In his comment to Azernews, economist Vugar Bayramov highlighted
that Azerbaijan's gas exports to Europe have been increasing
significantly since the end of 2020.
"On December 31, 2020, Azerbaijani gas entered the European
Union for the first time. Since then, Azerbaijan has progressively
increased its blue gas exports to Europe. Specifically, around 9
billion cubic meters were exported in 2021, 11.4 billion cubic
meters in 2022, 12 billion cubic meters in 2023, and exports are
expected to reach 13 billion cubic meters in 2024. Alongside the
Shah Deniz field, Azerbaijan plans to produce gas from the Absheron
field and five other fields, with significant potential in these
additional fields".
According to the expert, these developments will directly impact
production: "It is expected that this will significantly enhance
the export capacity of gas from these fields."
Vugar Bayramov emphasized Azerbaijan's substantial export
potential, which will facilitate increased blue gas shipments to
the European market. He noted, "Given Azerbaijan's considerable
export opportunities, there is potential to boost production,
thereby allowing for greater blue gas exports to Europe. Azerbaijan
remains the primary alternative source of new blue gas imports for
Europe. The development of new fields strengthens this alternative,
enabling even more access to the European market."
Azerbaijan has largely funded the Shah Deniz gas project
and the Southern Gas Corridor through its own resources and
loans .
The expert highlighted the critical role of financing in these
developments: "Attracting finance is crucial. Azerbaijan has funded
the export of Shah Deniz blue gas and the Southern Gas Corridor
with its own capital and loans. Initially estimated to cost $45
billion, the project's cost was later reduced to $40 billion and
then to $38 billion due to regional currency devaluations and cost
savings."
Bayramov emphasized the need for continued investment: "The
Southern Gas Corridor was realized through significant funding,
particularly loans, and it is essential to increase financial
support from Europe. Investment is needed to boost blue gas
production, especially as Europe aims to increase the share of
green energy. In this context, investments should focus on both
traditional energy sources and blue gas to meet demand."
Bayramov asserted that Azerbaijan is uniquely positioned to meet
Europe's growing blue gas needs: "Azerbaijan has the capacity to
transport more blue gas to Europe, and increased European
investment is crucial for long-term blue gas imports."
He added that enhanced European investment would enable Azerbaijan
to export more liquefied gas than currently projected. "Contracts
and investments are critical. The principle of 'more investment for
more gas' should guide European Union policies."
Currently, Azerbaijan has nine gas export partners, seven of which
are European countries, expanding the geography of gas supply to
Europe.
On March 1, 2024, during the 10th meeting of the Southern Gas
Corridor Consultative Council and the 2nd meeting of the Green
Energy Consultative Council, President Ilham Aliyev discussed
future energy plans, including developments at the
"Azeri-Chirag-Gunashli" and "Umid" fields.
"First of all, we anticipate beginning the production of natural
gas from the Azeri-Chirag-Guneshli deep gas project in the first
quarter of next year. This project is promising due to its large
reserves. The 'Azeri-Chirag-Guneshli' fields have been a major
source of our oil exports for many years. We have now agreed with
our partners to initiate exploration, which will provide an
additional boost."
During his speech, President Ilham Aliyev indicated that
production would start at approximately half a billion cubic
meters, with expectations for this volume to increase 3-4 times
within a few years.
This new resource, alongside the volumes from the "Shah Deniz"
and "Absheron" fields, will enhance our supply. Additionally, we
have plans for the development of the second phase of the Umid
gas-condensate field, which could potentially yield 2-3 billion
cubic meters of gas within 3-4 years," President Ilham Aliyev
added.
These steps to diversify Azerbaijan's economy are enhancing the
country's reputation. As President Aliyev noted, longstanding
rumors that Azerbaijan does not have enough gas to meet the growing
needs of European consumers have proven to be completely unfounded.
He emphasized that such claims were part of a campaign against
Azerbaijan, aimed at undermining its potential and misleading the
international community and consumers.
Azerbaijan's substantial investments in the Shah Deniz gas
project and the Southern Gas Corridor have demonstrated its
dedication to enhancing energy infrastructure and securing
international partnerships. President Ilham Aliyev's recent
announcements regarding future projects emphasize the country's
strategic focus on expanding its gas production and addressing
European energy needs.
Overall, Azerbaijan's ongoing developments in the energy sector
not only bolster its economic diversification but also strengthen
its global standing as a reliable energy supplier. The country's
proactive measures and strategic investments challenge outdated
perceptions and highlight its capacity to support Europe's evolving
energy landscape.
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