Weekly review of major events in Azerbaijani energy market

Oil&Gas Materials 29 January 2022 13:49 (UTC +04:00)
Weekly review of major events in Azerbaijani energy market

BAKU, Azerbaijan, Jan. 29

By Leman Zeynalova - Trend:

The highlight of this week in the energy sector was related to gas supply disruptions from Iran to Turkey. In this regard, Azerbaijan said it will increase gas transportation to this country. Amid technical problems in gas transportation from Iran to Turkey, the country has applied to Azerbaijan Gas Supply Company Limited (AGSC) in order to overcome the temporary shortage. AGSC, which represents the Shah Deniz consortium, has already responded to Turkey’s request and mobilizing the existing potential, the company will be increasing natural gas exports from Azerbaijan to Turkey in line with the emerging demand.

Moreover, SOCAR Enerji Ticaret AŞ will bring 4 million cubic meters of spot pipe gas per day from Turkgozu entry point in Ardahan in February.

This week was also remarkable with active discussions over the upcoming Southern Gas Corridor Advisory Council’s meeting to be held in Baku. A number of countries have already announced their participation at the event. Bulgarian energy minister Alexander Nikolov, Croatian State Secretary Ivo Milatić, Director Kristina Čelić and Florijana Đedović, Head of Business Unit of EU Funds at Plinacro Ltd, Deputy Prime Minister and Minister of mining and energy, prof. Zorana Mihajlović, PhD and Romanian energy minister Virgil-Daniel Popescu will visit Azerbaijan.

After a long break, this week we got some updates regarding the Ionian Adriatic Pipeline (IAP), which is supposed to be connected to the Trans Adriatic Pipeline (TAP). Croatian Ambassador to Azerbaijan Branko Zebic said that The COVID-19 situation prevented Ionian-Adriatic Pipeline project stakeholders from establishing the project company. There is an intention that representatives of all four governments will sign the statement of support for the development of project company on 4 February 2022 on the margins of the Southern Gas Corridor Ministerial Meeting in Baku. The company will be established in the next few months, depending on the pandemic situation.

ICGB signed a contract with PRISMA European Capacity Platform GmbH, Europe’s leading gas capacity trading platform, marking a major milestone in the preparations for the pipeline’s launch of commercial operation. ICGB will auction its capacity at the interconnection points with DESFA and TAP in Greece via PRISMA.

The IGB pipeline’s capacity is 3 bcm/y in the direction from Greece to Bulgaria and can be extended to 5 bcm/y allowing reverse flow if there’s market interest. Currently, half of the interconnector’s capacity is already reserved – a total of 1,57 bcm. Four out of the five shippers that have booked capacity are entirely new to the Bulgarian market and that leads us to believe the international and market interest in the project will only be growing after its commercial launch.

The State Oil Fund of the Republic of Azerbaijan (SOFAZ) has placed a deposit in the amount of one billion euros for a period of six months with the Central Bank of Turkey. These investments will make a positive contribution to Turkey's financial stability. The investment of these funds in the Central Bank of Turkey was carried out within the investment strategy of SOFAZ.

SOCAR AQS and the Iraqi Drilling Company signed a protocol reflecting preliminary agreements to continue cooperation on drilling operations.

SOCAR Turkey named new target markets for Petkim’s products. Malaysia and Pakistan are among the markets where the products of Petkim petrochemical complex may enter. The company continues to work on integration of innovative solutions into the STAR Oil Refinery in order to ensure sustainable production with minimal impact on environment. It is also working on new ideas to even more improve the operation integration of STAR Refinery and Petkim petrochemical complex and looking into new opportunities.
This week featured two important events in the renewable energy sphere. Firstly, Azerbaijan and the World Bank discussed the ways to use wind energy potential of the Caspian Sea.

Azerbaijan's Energy Minister Parviz Shahbazov received the World Bank Mission led by Yasemin Oruj, a chief expert on energy and task group head, who was on a visit to Baku. At the meeting, the first draft of the road map on offshore wind energy use was presented and discussed. Besides, various scenarios for the use of large wind energy potential in the Azerbaijani part of the Caspian Sea were considered, and the sides exchanged views on the potential for construction in concrete zones where the pilot and commercial projects could be implemented. It was emphasized that the road map will contribute to attracting private investment in the field and increasing energy exports in the future.

Secondly, Azerbaijan’s energy ministry announced that it is planned to complete the construction of Khudaferin and Giz Galasi hydroelectric power plants in 2.5 years.


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