BAKU, Azerbaijan, Nov.17
By Leman Zeynalova – Trend:
The Southern Gas Corridor project starting gas exports to Europe is a welcome development, as it allows for some diversification away from crude oil exports, Eugene Chiam, analyst at Fitch Ratings told Trend.
“The project is a small fraction of Europe’s gas imports, but fits well within Europe’s broader strategy to diversify its gas dependence away from Russia,” she said.
“Our general view about Azerbaijan’s oil and gas sector from a sovereign rating perspective is that it continues to be a key driver of the economy, fiscal revenues and external receipts. High reliance of the economy, public finances and external finances on oil and gas sector makes Azerbaijan vulnerable to external shocks, and the journey towards diversification of the economy appears to be a gradual one.
The oil and gas sector appears to be resilient to slightly lower international oil prices as some estimates place production break-even prices at USD15pb,” Chiam added.
Four and a half years after the inauguration of construction works in Thessaloniki, Southern Gas Corridor’s European leg, the Trans Adriatic Pipeline (TAP), an 878-km gas transportation system crossing Greece, Albania, the Adriatic Sea and Italy, began commercial operations.
Gas supplies via the Southern Gas Corridor will begin in coming months, Ibrahim Ahmadov, deputy head of the Public Relations and Event Management Department at Azerbaijan’s state oil company SOCAR, told Trend.
“After the completion of construction, the Trans Adriatic Pipeline (TAP) was connected to the network of Italian Snam company. Thereby, the pipeline running from Azerbaijan to Europe has been connected to the European network and is fully ready for gas supplies. It means that the Southern Gas Corridor has been completed. Direct gas transportation from the Caspian basin to Europe via this system will start in coming months,” he said.
---
Follow the author on Twitter: @Lyaman_Zeyn