BAKU, Azerbaijan, July 24. On July 18, "A Memorandum of Understanding on Strategic Partnership in the field of energy between the European Union represented by the European Commission and the Republic of Azerbaijan" has been signed between Azerbaijan and the European Union.
President Azerbaijan Ilham Aliyev and President of the European Commission Ursula von der Leyen signed the document.
"This agreement provides a timely opportunity for the EU to consolidate a new gas market for its energy security. This agreement will enable Azerbaijan to double its gas exports to the EU for the next five years, which in turn means less dependency on Russian gas for the EU," Director of the Institute of Peace and Diplomatic Studies, Pakistani political analyst Muhammad Asif Noor told Trend.
He said this agreement is significant in the backdrop of the situation in Ukraine as a result of which supplies of Russian energy resources to various European countries were almost halted.
Noor believes Azerbaijan and EU are committed to strengthening their cooperation in energy and other prospective areas.
"The President of the European Commission clearly stated that the agreement reflects the renewed commitment of the EU to drift away from Russian markets. This enables the significance of Azerbaijan in the geo-economic relations with the EU and Azerbaijan because it will allow Azerbaijan to double its outflow of gas towards the EU. It will cover an extra 4 billion cubic meters of gas but will increase to 20 billion cubic meters by 2027. It further means that the contract will not end in 2027 because energy demands in Europe are unlikely to go down," he said.
Noor said Azerbaijan is expected to become a major gas supplier to the EU, especially after the disruption of the supplies due to the situation in Ukraine.
"There is an expectation that its supplies to the EU will hit 20 billion cubic meters by 2027. Europe is not self-reliant in its energy needs despite massive investments in renewable energy projects. The scaling down of Russian supplies to states forced the EU to look for new markets. Azerbaijan is not only the next market but an already thriving market devoid of any implications from any regional or global power," the analyst explained.
He emphasized that this agreement is not the first one, as the sides have already signed an MoU in 2006 and Declaration on Southern Gas Corridor, a 3300-km long pipeline, signed in 2011.
"Given the current political environment around Europe, the stakes for Azerbaijan will increase in the energy security calculus of the EU. More Azerbaijan gas inflow to the EU will change the energy map of Europe. A reliable partner is something the EU values the most. In return, the EU may plan to invest in renewable projects such as wind and solar energy in Azerbaijan and regional markets. The potential of solar and wind power production in liberated lands of Azerbaijan is 9,200 MW, while the potential of wind energy in the Caspian region is 157 gigawatts," Noor said.
Furthermore, the analyst pointed out that the energy needs of the EU are very significant for growth and market stability, and it is only possible through uninterrupted supplies of energy.
"Any country will be important for the richest economic bloc in the world, which provides gas. Azerbaijan will be able to get modern technology, investments, and development in multiple sectors, including clean energy. In addition, it will pump billions of dollars into its economy in exchange for gas, adding revenue to its foreign exchange reserves. The EU is ready to invest in wind and solar energy projects in the Karabakh region," he concluded.