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Azerbaijani gas output to expand by over 30% in 2019-2025

Oil&Gas Materials 10 June 2020 09:26 (UTC +04:00)

BAKU, Azerbaijan, June 10

By Leman Zeynalova – Trend:

Azerbaijani gas production is set to expand by over 30 percent in 2019-2025, with the Trans Anatolian Natural Gas Pipeline (TANAP) and the Trans Adriatic Pipeline (TAP) system ramping up to supply the European market from the Shah Deniz field, Trend reports with reference to the International Energy Agency (IEA).

Overall, Eurasian gas production is expected to grow at a rate of 1.8 percent per year through the forecast to reach almost 1 030 bcm in 2025, primarily supported by export-oriented projects, according to the IEA.

“Russia alone accounts for over 70 percent of the region’s growth, as its pipeline supplies to China and LNG exports ramp up. Central Asian production grows at a rate of 2 percent, as Turkmen and Kazakh production growth outpaces declining output in Uzbekistan,” reads the report.

IEA expects natural gas demand in Eurasia to grow by 0.5 percent per year between 2019-25, limited by the modest economic growth prospects of the region and the already very high gas-intensity of those economies.

“The industrial sector alone will account for almost half of incremental gas demand, driven primarily by chemicals and fertilisers, benefitting from the relatively low feed gas costs in the region. Energy industry own use is expected to grow at an average rate of 3 percent per year, driven by the region’s export-oriented growth in gas production,” reads the report.

IEA believes that European gas demand is expected to remain stable through the forecast period. In the power sector, the gradual phase-out of over 50 GW of nuclear-, coal- and lignite-fired power generation capacity creates additional market space for gas-fired power plants.

“However, growth is limited by the rapid expansion of renewable power generation, set to increase by almost 30 percent over the medium term. Natural gas demand in industry is expected to recover to its pre-crisis levels, while further growth potential remains limited. Europe’s import requirements are expected to increase by over 10 percent, or 45 bcm/y, in the next five years, despite stagnant demand. This is driven by a rapidly declining domestic production in northwest Europe,” reads the report.

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