...

Azerbaijani gas can increase its share in European market in few years

Oil&Gas Materials 1 December 2022 14:26 (UTC +04:00)
Azerbaijani gas can increase its share in European market in few years
Laman Zeynalova
Laman Zeynalova
Read more

BAKU, Azerbaijan, December 1. Azerbaijan could fill-in, from currently 2 percent, to some 10-15 percent of Europe’s gas needs in a few years, CEO at Romania's Smartlink Communications consulting company, analyst, consultant, and think tanker Radu Magdin told Trend Dec.1.

“The key constraints are the length and pipeline transportation delivery in Europe. Therefore, to speed-up SGC gas delivery to Balkan countries (e.g. Bulgaria, Romania, Albania, Serbia) and Eastern Europe (e.g. Moldova, Ukraine), expansion of the pipelines and interconnectors throughout these countries are required to increase the gas transportation capacity. Gas supply pipelines and interconnectors have to be met by availability of the additional financial instruments: from the countries’ national gas operators, EC infrastructure investments and European international investments instruments,” he said.

Radu Magdin noted that SE Europe countries have particular economic, social and political vulnerabilities to the Russian gas supply.

“Russian gas supply speculations and gas cuts unpredictability impact these countries' politics and households’ welfare security. So SGC has the potential to increasingly contribute to the reduction of these countries’ vulnerabilities. For SE Europe countries with SGC balanced gas supply, we should observe an improvement of these countries' gas supply and price terms negotiation capacity with Russia and higher degree of resilience. Countries of South Eastern Europe (Greece, Slovenia, Bulgaria, Moldova, Romania, Macedonia, Bosnia and Herzegovina, etc.) are particularly vulnerable given their high (50-75%) gas dependency,” added the analyst.

He pointed out that Azerbaijan, within the extended SGC, has a distinctive role to play in the implementation of the EU’s REPowerEU Plan.

“This is the plan adopted by the Commission on May 18, 2022, and aims to reduce by 40% (150 bcma or USD 100 billion a year) the reliance on Russian fossil fuels and to diversify Europe's energy supply that includes European Green Deal, LNG diversification, gas consumption efficiency, alternative/renewable energy supply. This year, Azerbaijan is expected to sell up to 12 bcma of gas to Europe. The expansion of SGC can increase the delivery to Europe to some 20 bmca in a few years. This is an important increase of natural gas for Europe and also for the region’ security. A further SGC expansion with the Trans-Caspian Gas Pipeline (Turkmenistan) could strengthen gas supply to Europe via the Southern Gas Corridor with Azerbaijan at the center. Building new and expanding the existing transportation pipelines to Europe remains the major constraint for the gas supply delivery to Europe,” said Magdin.

He recalled that recently in Baku, von der Leyen emphasised the EU’s long-term partnership with Azerbaijan including boosting Azerbaijan’s export potential in the renewable energy sector, including offshore wind and so-called green hydrogen and declared it a reliable partner.

“Thus, there is a lot to be done between Europe and Azerbaijan in terms of energy cooperation,” said the analyst.

---

Follow the author on Twitter: @Lyaman_Zeyn

Tags:
Latest

Latest