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Options for diversifying sources for Southern Gas Corridor

Oil&Gas Materials 23 April 2021 11:59 (UTC +04:00)

BAKU, Azerbaijan, Apr.23

By Leman Zeynalova – Trend:

There are some interesting options for diversifying the sources of gas for the Southern Gas Corridor, Francis Perrin, Senior Fellow at the Policy Center for the New South (PCNS, Rabat) and at the French Institute for International and Strategic Affairs (IRIS, Paris) told Trend.

“The Southern Gas Corridor (SGC) is now a reality with natural gas from Azerbaijan (the Shah Deniz field in the Caspian Sea) flowing to the European Union (Greece, Bulgaria and Italy) since the end of 2020. Georgia, Turkey and Albania also import Azerbaijani gas through the SGC. But there are some ideas and plans for expansion of the SGC. This expansion means of course new sources of gas and new markets for this gas.

As far as sources are concerned there is Azerbaijan and other countries. Apart from the supergiant Shah Deniz field, which is operated by BP, there is the very recent Shafag-Asiman gas and condensate discovery in the Caspian Sea. The Shafag-Asiman offshore block is held by BP and by SOCAR, the national oil company of Azerbaijan. The first exploration well drilled on this block did produce gas and condensate but it is of course too early to get figures about gas reserves. We must wait for further exploration and appraisal work by BP and SOCAR but it is promising,” said Perrin.

He recalled that several years ago, in June 2012, the Absheron gas discovery was declared commercial.

“The Absheron offshore field will feed the national market but it has a very significant potential. Absheron is jointly developed by Total and SOCAR. Outside Azerbaijan there is the possibility for some other Caspian countries to export part of their gas production to Europe thanks to the SGC. The most likely option is Turkmenistan even if no decision has been taken at this stage. This option was greatly strengthened with the agreement between Azerbaijan and Turkmenistan about the joint development of the Dostluk field in the Caspian Sea. Dostluk is a shared field,” noted Perrin.

SOCAR recently discussed another possibility: the export of part of Israel's gas, discovered in the Eastern Mediterranean, to Turkey and the use of the TANAP gasline, which is part of the SGC (the SGC includes the South Caucasus Pipeline, TANAP in Turkey and TAP across Greece, Albanian and Italy). Azerbaijan is supporting this option, added the expert.

“It is a possibility but it would require an improvement in the relationship between Israel and Turkey, which is very bad for some time. Gas would come from the Leviathan field. Israel is exploring various options including the Eastern Med gasline to Cyprus, Greece and Italy and the export of liquefied natural gas (LNG).

As far as new markets are concerned there is the European Union of course even if there is a very hot debate within the EU about the future of gas in the European energy mix. But it remains an important option for further deliveries from the Caspian Sea. And SOCAR is also looking actively at the Balkans region. So far no firm decisions have been taken about future sources and markets but there are some interesting options on the table,” said Perrin.

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Follow the author on Twitter: @Lyaman_Zeyn

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