Southern Gas Corridor helped EU during unprecedented energy crisis - Kadri Simson (Interview)

Oil&Gas Materials 3 February 2023 08:00 (UTC +04:00)
Southern Gas Corridor helped EU during unprecedented energy crisis - Kadri Simson (Interview)
Laman Zeynalova
Laman Zeynalova
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BAKU, Azerbaijan, Feb.3. The meeting of the Southern Gas Corridor Advisory Council will be a great opportunity to both look back at how this project has helped the EU during this unprecedented energy crisis, and to reflect together on the next steps of the enhanced energy cooperation, Kadri Simson, the EU Commissioner for Energy, said in an exclusive interview with Trend.

"A central topic in our discussions will be the expansion of the Southern Gas Corridor. As you know, this is a project supported via our REPowerEU plan, and our new Memorandum of Understanding on a Strategic Partnership in the Field of Energy with Azerbaijan. We aim to increase its capacity to 20 billion cubic meters annually as of 2027. On top of the political support, we are now also exploring with the EBRD the possibility of providing financial support to facilitate its expansion," she said.

The EU Commissioner also expect that this year’s meetings will focus prominently on green energy and the clean energy transition.

"This is an important area of mutual interest both for Azerbaijan and for the EU, as set out in our recent MoU. The EU is ready to further support Azerbaijan in its green transition, including through the Economic Investment Plan," Kadri Simson added.

Project on increasing gas supplies from Azerbaijan

Simson said EU is aware that transmission system operators (TSOs) in Bulgaria, Romania, Hungary, and Slovakia are considering using existing and new infrastructure as a new corridor for importing natural gas from Azerbaijan.

"Central-Eastern and South-Eastern Europe are amongst the most dependent regions in Europe when it comes to gas imports from one single source. At the same time, the diversification of supplies, routes and sources have been significantly improved in the past few years, thanks to the EU infrastructure policy, the realisation of Projects of Common interest under the TEN-E, and in some cases financial support through the Connecting Europe Facility and other instruments. Nevertheless, if there is a market interest, the Commission certainly supports projects that could further help diversify gas supplies in the region," the Commissioner explained.

Simson pointed out that at the height of the energy crisis last year, the SGC proved to be a crucial source of piped gas supply for Europe.

"Gas volumes delivered to the EU via the SGC in 2022 increased from around 8 billion cubic meters to 11.4, therefore by more than 40% compared with 2021. Azerbaijan has proved to be a reliable energy partner for the European Union over the past years. Therefore, I am glad to note that the expansion of the SGC has strong political support from the EU and its Member States. As Commission, we are trying to facilitate the process. We are in regular contact with all concerned stakeholders: Governments of transit and destination countries, international financial institutions, companies. Of course, for the project to move forward we also hope for a successful market test for the Trans Adriatic Pipeline section of the SGC," she said.

Kadri Simson noted that in parallel, the Commission is also working in close cooperation with the Member States to make the joint purchasing of gas a reality.

"Demand aggregation will be the first step in this process and we trust this will help ensure optimal demand conditions to our reliable supplying countries," she added.

Cooperation on green energy

The Commissioner pointed out that the EU has long supported Azerbaijan’s energy transition efforts via our EU4Energy programme and dedicated technical assistance and investments on energy efficiency.

"The two laws on renewable energy sources and energy efficiency adopted by Azerbaijan in 2021, are a clear example of commitment, and the upgrading of energy-efficient streetlights in Ganja - the second largest city of Azerbaijan – is a good example of how EU-backed programs can work in practice. But I trust that this year we will take our long-term sustainable energy partnership, as set out in our MoU, even further. Azerbaijan has a strong interest in accelerating the deployment of renewable energy and the decarbonisation of its economy. Crucially, we will continue to support reforms and green investments that contribute to Azerbaijan’s economic diversification and energy transition. To this aim, we have proposed to establish a multi-country Working Group on the export of renewable electricity under the EU4Energy programme, which we hope Azerbaijan will join. This is a key step to advance technical cooperation on this important matter and prepare the ground for possible future investments in renewable energy, including under the EU’s Economic and Investment Plan," she said.

Simson noted that EU will also continue to work with Azerbaijan towards the adoption of an ambitious Long Term Low Emission Development Strategy before the Global Stocktake of the Paris Agreement this year.

"This would pave the way to accelerating Azerbaijan’s decarbonisation, and also ensure predictability of investments. In the EU, we have shown that setting a climate-neutrality target drives decarbonisation while providing investors with much-needed certainty," she added.

Trans Caspian Gas Pipeline

Simson believes that all the conditions must be in place for the envisaged expansion of the SGC to be delivered on time by 2027 and this starts from the production outlook.

"We are looking with great interest at possible Trans-Caspian gas cooperation projects and are committed to engaging with all the relevant stakeholders in the region. The Advisory Council ministerial meetings will be an important opportunity to do so," the EU Commissioner concluded.


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