Trend commentator: Azerbaijani gas export and Nakhichevan Autonomous Republic's energy security

Oil&Gas Materials 10 July 2010 15:04 (UTC +04:00)

Azerbaijan, Baku, July 10 / Trend /

Trend Commentator Emil Ismayilov  

The presence of multiple routes of gas supplies allows Azerbaijan to expand sale of fuels in different directions and ensure the country's energy security in a competitive environment for new energy sources by reducing dependence on a single direction.

Diversification of gas supplies is a part of the state energy policy of Azerbaijan. Iranian direction takes an important place in this process.

Today SOCAR (State Oil Company of Azerbaijan) is working to achieve long-term contract with the Iranian side. However, lack of necessary infrastructure does not allow to achieve the goals even if there is desire for large volumes of gas supplies (Iran stated about the ability to buy up to 5 billion cubic meters of Azerbaijani gas). The technical condition of gas transportation infrastructure between the two countries does not allow to transport large volumes of gas today in southern direction. Now SOCAR expands capacity of a gas compressor station in Astara to increase gas supplies to Iran. The gas pipeline which runs from Azerbaijan to Iran will be also reconstructed. Upon completion of these operations scheduled for autumn, the contract for long-term supplies is expected to be signed. It is planned to increase volumes up to 3-3,5 million cubic meters per day from the current 1.2 million cubic meters.

However, the reconstruction of the existing gas transportation line, built nearly 40 years ago, does not fully guarantee stability of supply. It does not allow to bring the volume of exports to the desired indices. It is necessary to create a new system to ensure full supplies.

SOCAR attaches great importance to the modernization of the gas distribution and gas transportation systems of the country. It plans to make significant investments in this process. A special program to develop the gas sector for 2010-2013 has been prepared. One of the points is construction of a new pipeline Kalmaz-Astara with a length of 360 km. The company's specialists have begun to prepare a feasibility study on a new gas pipeline. It is not ruled out that the main export volumes of Azerbaijani gas will be transported to Iran via a new gas pipeline after the construction of a new pipeline Kalmaz-Astara.

Now Azerbaijan transports gas to Iran to the amount of 1-1,2 million cubic meters a day within the "swap" transactions for gas supply of the Nakhchivan Autonomous Republic.

Gas from Azerbaijan to Iran is transported by pipeline Gazi-Magomed-Actara-Bind-Biand (1,200 mm), length of 1,474.5 kilometers, including the territory of Azerbaijan - 296.5 kilometers. Azerbaijan is considering the possibility of diversification of gas supply to Nakhchivan together with the development of Iranian direction, and as a consequence, increase in energy security of the autonomous republic.

SOCAR plans to build a new gas pipeline from Turkey to Nakhchivan. A feasibility study of gas pipeline Igdir (Turkey) - Sederek (Nakhchivan) with a length of 180 kilometers has been already completed. The company also envisages the construction of a storage facility to improve gas supply of the Autonomous Republic.

Now Turkey is one of the main directions to which Azerbaijan exports its gas. Gas, produced at a large field Shah Deniz, is supplied to Turkey via the South Caucasus gas pipeline.

Azerbaijan, having its gas in Turkey, can arrange its supply to Nakhchivan under replacement (swap), or deliver it to Nakhchivan via Turkish domestic gas networks. Today, Azerbaijan has the agreement signed with Turkey in early June on the transit of its own gas through its territory. According to Turkish sources, Azerbaijani gas supplies to Nakhichevan through Turkey was a part of agreements on a package of gas issues, signed in June. Construction of a new gas pipeline from Turkey to Nakhchivan along with the development of Iran's export direction will completely ensure the energy security of the autonomous republic and diversify the directions of gas transportation.