BAKU, Azerbaijan, June 17. This week, the consortium operation the Trans-Adriatic Pipeline (TAP), one of main sources of Azerbaijani gas supply for Europe, announced that it is fully prepared to work on doubling the capacity once the results confirm binding commitments from shippers for further long-term capacity.
Luca Schieppati, TAP Managind Director, noted that the initial phase of expansion will facilitate the pipeline's subsequent growth, potentially doubling its capacity, contingent on market demand. He further emphasized that the first stage of expansion will enable the transportation of an additional 1.2 bcm of gas to Italy and Albania.
Furthermore, this week it was revealed that Pakistani Cabinet's Economic Coordination Committee (ECC) granted approval to a framework agreement for the import of LNG from Azerbaijan. The agreement will be carried out by Pakistan LNG Ltd (PLL), a state-owned company, through government-to-government trading.
The initial duration of the agreement will be one year, with the possibility of a one-year extension. Under this agreement, Azerbaijan’s state oil company SOCAR will provide one LNG cargo per month, with an offer made 45 days prior to the relevant delivery window. Each cargo offer will have a specified validity period, during which PLL can accept or reject the offer. The pricing of LNG will be denominated in US dollars and offered by SOCAR to PLL.
Meanwhile, as Azerbaijan's Energy Minister Parviz Shahbazov announced, over the first 5 months of the current year, Azerbaijan exported 4.8 bcm of natural gas to Europe, which is an increase of 9.6 percent year-on-year.
At the same time, Minister Shahbazov noted that the country's oil production (including condensate) in the reporting period amounted to 12.7 million tons, while exports totaled 10.6 million tons.
Broad data on gas production in the country was published this week. In particular, since the commissioning of the Azeri-Chirag-Guneshli (ACG) and Shah Deniz fields until June 1, 2023, gas production on those fields amounted to 402.7 bcm. Gas exports from the Shah Deniz block of fields amounted to about 136.5 billion cubic meters as of June 1, 2023.
Furthermore, the total volume of oil and condensate production in Azerbaijan since the start of development of hydrocarbon fields as of January 1, 2023 stood at 2.2 billion tons. At the same time, Azerbaijan has produced 992 bcm of gas during this period.
This week, OPEC has published its monthly forecast. According to it, Azerbaijan's il production in 2023 is expected to increase by 29,000 b/d to average 0.7 mb/d. Thus, OPEC has downgraded Azerbaijan's liquids output forecast for the current year by a minor 8,000 b/d, compared to the previous month's assessment, due to lower-than-expected production pace in April 2023.
Meanwhile, Azerbaijani Ambassador to Bulgaria Huseyn Huseynov has announced that Azerbaijan is interested in household gasification in Bulgaria.
During a meeting with Bulgarian Energy Minister Rumen Radev, the ambassador emphasized the need to recommence the Bulgarian-Azerbaijani intergovernmental commission on economic cooperation as soon as possible.
Minister Radev pointed out that Azerbaijan is a strategic and reliable energy partner. Both sides confirmed their interest in expanding cooperation in gas supplies to the Bulgarian and regional markets, as well as in the development of renewable energy technologies. They also discussed the possibilities of using hydrogen.