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Azerbaijani gas may help Europe to cover possible deficit

Oil&Gas Materials 7 March 2022 10:08 (UTC +04:00)
Azerbaijani gas may help Europe to cover possible deficit

BAKU, Azerbaijan, March 7

By Leman Zeynalova – Trend:

Azerbaijani gas may contribute to Europe’s goal to cover the possible deficit in the case of curtailment of flows from Russia, Trend reports with reference to Oxford Institute of Energy Studies (OIES).

OIES experts note that there are potential alternative sources of gas supply to partly mitigate the loss of flows. While the LNG market is very tight, more LNG could be diverted to Europe, being imported either directly into France, Belgium, Netherland and Italy or via the UK acting as a land bridge. Based on the scenarios from our quarterly review this could be some 25 bcm diverted from other markets. This would most likely come to Europe in the summer – perhaps 4 bcm a month. Gas production is somewhat limited in this region, outside the Netherlands, but there has been some discussion of possibly higher production from Groningen, before it closes. Still, this would account for maybe only 5 bcm or so in total during 2022. Higher pipeline imports from Norway, Algeria and Azerbaijan are also possible, resulting in some 10 bcm more in the April 2022 to March 2023 period.

“In total this could alleviate the shortfall by some 40 bcm, mostly in the summer, which would help to at least keep storage levels stable or even topping them up a little, in preparation for the winter. The extra 40 bcm, if realised, would maybe push back the period before large scale demand destruction might occur to early December,” reads the report published by OIES.

Azerbaijan began gas supplies to Europe via the Southern Gas Corridor on December 31, 2020.

As the European section of the Southern Gas Corridor, TAP has the capacity to transport approximately 10 billion cubic meters of gas per annum (bcm/a) to several markets in Europe. The pipeline is also designed with the potential to expand its throughput capacity up to 20 bcm/a.

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Follow the author on Twitter: @Lyaman_Zeyn

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