Southern Gas Corridor - Europe's big hope amid crisis

Economy Materials 4 February 2022 00:01 (UTC +04:00)
Southern Gas Corridor - Europe's big hope amid crisis

BAKU, Azerbaijan, Feb. 3

By Leman Zeynalova - Trend:

Baku, the capital of Azerbaijan, will host another meeting of the Advisory Council of the Southern Gas Corridor (SGC) on February 4. The high-ranking representatives of the European countries, as well as those from the US and Turkey will attend the event.

Among them are European Energy Commissioner Kadri Simson, Romanian Minister of Energy Virgil-Daniel Popescu, heads of Romgaz and Transgaz companies, Deputy Prime Minister and Minister of Mining and Energy of Serbia Zorana Mihajlovic, State Secretary and Assistant Minister of Croatia Ivo Milatic, Director Kristina Celic and head of business unit of EU Funds at Croatia’s Plinacro Ltd Florijana Đedovic, Minister of Energy of Bulgaria Alexander Nikolov, Minister of Economy of North Macedonia Kreshnik Bekteshi and others.

The main topic of the meeting is expected to be the issue of increasing the supply of Azerbaijani gas to Europe through the Southern Gas Corridor amid the energy crisis which is observed on the continent since last year.

Azerbaijani gas has been in supply to Europe through the Southern Gas Corridor since December 31, 2020. This large-scale project is aimed at diversifying the routes and sources of energy supplies, thereby contributing to the strengthening of Europe's energy security.

Some 8.1 billion standard cubic meters of gas were supplied to Europe through the European section of SGC - TAP from the moment of commissioning and until December 31, 2021. Some 6.8 billion cubic meters out of these volumes were supplied to Italy while 1.2 billion cubic meters to Greece and Bulgaria.

Italy managed not only to meet domestic demand, but also to export some volumes due to gas supplies via TAP.

Thus, Italy sold 20 million cubic meters of gas to other countries on the last day of 2021, which is approximately 10 percent of its net consumption, which on that day was 214 million cubic meters. Moreover, it was repeatedly stressed that a bigger increase in gas prices in Europe was prevented thanks to Azerbaijani gas. Taking into account that TAP has not even reached the initial supply volumes of 10 billion cubic meters per year, these achievements can be considered significant.

The issue of doubling the capacity of the pipeline to 20 billion cubic meters per year becomes more relevant amid this situation. For this purpose European Energy Commissioner Kadri Simson will visit Azerbaijan.

The TAP consortium said that the capacity of the pipeline can be increased earlier than it was planned.

Azerbaijan’s ambassador to the UK Elin Suleymanov spoke on the issue, saying that Azerbaijan is ready to supply Europe with some emergency gas. Suleymanov said that Azerbaijan can produce more gas and expand its Southern Gas Corridor.

“It can also channel flows from Turkmenistan as the two nations are set to develop Dostlug field in the Caspian Sea,” the ambassador said.

In an interview with local TV channels on January 12 Azerbaijani President Ilham Aliyev said that about 19 billion cubic meters of gas will be exported this year. More than 8 billion of it will be exported to Turkey and more than 7 billion to Italy. The remaining gas will be divided between Georgia, Bulgaria and Greece.

Former US Ambassador to Azerbaijan Robert Cekuta told Trend that “Expanded access to the Southern Gas Corridor would be important at any time, but the current geopolitical situation makes the upcoming discussion of this topic especially consequential.”

​ Cekuta stressed that the current and future energy situation in Europe makes the upcoming meeting of the Southern Gas Corridor Advisory Council quite important.

"European markets are experiencing shortfalls in supply and also much higher prices for gas, and indeed prices for energy in general. While some have looked to Gazprom and Russia to sell them additional gas in the last quarter of 2021, Gazprom has not been forthcoming. The February meeting is a timely opportunity for Azerbaijan, the EU, Turkey, the US, and other key players to look at the current situation, to see where demand is likely to go, and to act to ensure needed supplies," Cekuta said.

"Let's face it, adequate affordable energy is essential to people's well-being, to a functioning economy, and to a country's national security.​ Participants in the February meeting can help meet this need for energy,” he said.

​Cekuta pointed out that one of the important things about the Southern Gas Corridor and one of the chief reasons why the US worked with Azerbaijan, Georgia, Turkey, Albania, Greece, Italy, and the EU along with SOCAR, BP, and others in the private sector to see it built was to help diversify European energy supplies.

“Diverse sources of energy improve the availability of energy in a market and help ensure the energy security, and thus the national security of a country,” former US ambassador said. “I know there are a number of countries, particularly in the Balkans, who are interested in expanded access to gas from the Southern Gas Corridor project.”

Meanwhile, analyst at Natural Gas Market at Norway-based Rystad Energy Zongqiang Luo said that is is likely the Trans Adriatic Pipeline (TAP) expansion would happen ahead of the original schedule considering the fact that the TAP pipeline flow had already tripled to around 24 million cubic meters (mcm) per day in December 2021 with the initial capacity had been booked for the next 20 years.

“In 2021, TAP pipeline had flowed around 6 bcm gas to Italy and another 1 bcm to Greece, and these flows are estimated to increase to 7.3 bcm and 1.7 bcm respectively in 2022 as the pipeline capacity could be increased to 20 bcm with the addition of two compressor stations and modifications to compressor stations,” he told Trend.

Zongqiang Luo stressed that TAP gas flows would be a great addition for European gas supplies.

The projects initiated by Azerbaijan are creating the energy map of the region and Europe. Azerbaijan’s main goal is to ensure energy security and contribute to the global development by achieving close cooperation among producing countries, transit countries and consumer countries.

Taking into account the global trends in its energy policy, Azerbaijan always pursues a consistent goal of ensuring energy security, stability at the domestic, regional and global levels.

Today Azerbaijan plays an important role in the global energy arena. The country has proved itself as a reliable partner in major energy projects and it is not surprising that to prevent the deepening of the gas crisis, European countries appeal to Azerbaijan to increase supplies.