BAKU, Azerbaijan, February 14. Azerbaijan possesses significant gas potential, and bp, along with other gas-producing companies operating in the country, hopes to secure new contracts with European buyers for the supply of additional gas volumes within reasonable terms, bp's Vice President for the Caspian region, Communications and External Affairs Bakhtiyar Aslanbayli told an Azerbaijani TV channel, Trend reports.
"Given the current realities, it is now difficult for gas buyers to sign long-term contracts exceeding 5-10 years. On the other hand, we are aware of contracts being signed for 10-15 years, primarily related to liquefied natural gas. We hope that gas contracts from Azerbaijan will be for reasonable terms, helping to exploit Azerbaijan's additional gas resources beyond the resources of Shah Deniz,'" Aslanbayli explained.
He reminded that, the investment decision for the full-scale development of the Caspian Shah Deniz field was made in December 2013 thanks to the signing of 25-year contracts earlier that year with nine European companies for the sale of 'major' gas from Shah Deniz.
"This is a distinctive feature of the global gas industry. First, there is a need for gas sales contracts that justify investments in gas extraction (upstream) and gas transportation (midstream). Certainly, it's possible to invest concurrently and negotiate with buyers, but at some point, everything will depend on how feasible it is, considering the realities of the world (RePowerEU and other nuances), to conclude long-term gas sales agreements," the vice president noted.
At the same time, he pointed out the reality of implementing the intentions outlined in the Energy Memorandum between Azerbaijan and the EU, signed in July 2022, to double gas deliveries from Azerbaijan to Europe, contingent on the consolidation of gas not only from Shah Deniz but also from Absheron, Umid-Babek, deep reservoir gas from the Azeri-Chirag-Gunashli block, and other resources.
To note, EU countries have been receiving gas from Azerbaijan through the Southern Gas Corridor since December 2020.
These deliveries amounted to 11.8 billion cubic meters in 2023, compared to 11.4 billion cubic meters in 2022, with the possibility of growth in 2024.