Azerbaijan's Gas Output Set To Surpass Oil Production, Says Rystad Energy


(MENAFN- Trend News Agency) BAKU, Azerbaijan, October 14. Azerbaijan's gas production is poised to outpace its oil output, driven by a series of significant projects in the pipeline, Rystad Energy, an independent research and business intelligence firm, told Trend .

The country's upstream gas sector is on track for substantial growth, aiming to increase gas output by 51% to 40 billion cubic meters per annum (Bcma) by the end of the decade compared to 2020 levels.

"Azerbaijan has lined up several key gas and gas-condensate fields for development to further raise its gas production," Rystad Energy noted. This surge is expected to result in gas production surpassing oil production in the coming years.

The gas sector received a significant boost after the Shah Deniz Phase 2 scheme came online in 2018, lifting the country's sales gas production by 83% from 2017 to nearly 36 billion cubic meters (Bcm) last year. Shah Deniz alone contributed approximately 72% of the overall gas production.

Gas exports have increased correspondingly, rising from 9.6 Bcm in 2018 to around 24 Bcm last year. "Roughly half of these exports went to Europe, with the rest to Türkiye and Georgia," Rystad Energy stated. In the second half of 2022, Azerbaijan signed a memorandum of understanding to double its export volumes to Europe to 20 Bcm by 2027, with Shah Deniz expected to play a significant role.

To facilitate these additional volumes to Europe via the Southern Gas Corridor, Azerbaijan is considering doubling the capacity of the Trans Adriatic Pipeline (TAP) to 20 Bcma, increasing the capacity of the Trans Anatolian Pipeline (TANAP) from 16 Bcma to 31 Bcma, and expanding the South Caucasus Pipeline from 24 Bcma to 31 Bcma.

"These pipeline expansions are costly and will require significant investments," Rystad Energy pointed out. "Azerbaijan's ambition to raise gas exports will require long-term commitments and commercial gas sales agreements from European buyers." The realization of these projects will depend on various factors, including economic considerations, alternative gas supply sources and routes to Europe, and potential geopolitical developments.

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