BAKU, Azerbaijan, June.8 The development of renewable energy sources might boost Azerbaijan’s gas export potential, Gulmira Rzayeva, Senior Visiting Research Fellow at Oxford Institute for Energy Studies told Trend.
“Per estimates, 30, or even 40 percent of the country’s energy production may come from renewable energy by 2030, and this is quite a lot. Azerbaijan has a huge potential in this regard”, she said.
According to Rzayeva, this can free up around 2.5 or 3.5 billion cubic meters of gas for exports. “Those are not big values given the fact that Azerbaijan’s gas demand is around 13 billion cubic meters. Still, it has a great growth potential”, the expert added.
As for other ways for Azerbaijan’s gas export expansion, Rzayeva said that there are a number of already discovered fields in Azerbaijan that need to have a final investment decision to start production. “Investments are a major issue because the market needs to be secured before the consortium, or the developers of the field will come up with the final decision. For example, in Europe, if one does not have long-term contracts with the buyers they can’t invest and start producing on the market,” she explained.
“What Azerbaijan wants is to sign long-term contracts with the buyers. This is a kind of Shah Deniz 2 model. The government needs to sign the long-term contracts, make a final investment decision (FID), start developing the discovered fields, expand the infrastructure if needed, and start exporting gas approximately in 4-5 years. This is the model that Azerbaijan wants from Europe. But the ball is on the Brussels’s side, and currently, there is no reaction from the EU’s side yet”, the researcher noted.
According to the expert, the third phase of Shah Deniz needs to be developed which can produce more than 10 billion cubic meters of gas.
“This is more effective than freeing up small volumes. If Azerbaijan does this in the next 3-5 years, this will significantly add to Azerbaijan’s export portfolio. Current high prices on the market we can gain a lot”, she added.
---
Follow the author on Twitter: @mariiiakhm