Moody's: Strategic Importance Of Azerbaijani Gas For Europe's Energy Security Reinforced Amid Geopolitical Tensions

(MENAFN- Trend News Agency) BAKU, Azerbaijan, May 22. The Strategic importance of Azerbaijani gas for Europe's energy security is reinforced amid geopolitical tensions, Trend reports via Moody's.

The rating agency notes that the Southern Gas Corridor closed joint-stock company's business profile is underpinned by its fairly large scale and integrated operations across the natural gas value chain, encompassing interests in the upstream segment and critical pipeline infrastructure.

“The scale, capital intensity and geopolitical significance of SGC's assets create high barriers to entry and enhance the company's operational resilience. Geographic diversification, with transportation assets spanning multiple countries, further reduces reliance on any single market and broadens the customer base. In addition, intergovernmental and host government agreements provide a robust legal framework for pipeline operations,” reads the latest report by Moody's.

Moody's analysts note that SGC also benefits from a solid presence in key markets, supported by strong underlying fundamentals, reflecting sustained demand for Azerbaijani gas in Turkiye and Europe.

“Demand is underpinned by Europe's energy diversification policies and political backing, as illustrated by TAP's exemptions from certain provisions of the EU Gas Directive. The strategic importance of gas supplies from Azerbaijan for regional energy security is further reinforced by ongoing geopolitical tensions related to the Russia-Ukraine war and conflict in the Middle East,” the report says.

At the same time, Moody's notes that the SGC is exposed to the more volatile upstream segment, with operational risks amplified by its reliance on a single producing field.

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