BAKU, Azerbaijan, March 4. The State Oil Company of Azerbaijan (SOCAR), represented by the Marketing and Economic Operations Department, was announced as the largest exporter of non-oil products from Azerbaijan among state-owned companies in January 2024 last week, Trend reports.
SOCAR's Marketing and Economic Operations Department exported non-oil products worth $33.1 million in the reporting month, compared to revenue of $29.6 million in January 2023.
SOCAR's other entity, SOCAR Polymer Joint Stock Company (revenue of $14.5 million), was also a major exporter.
AzerEnergy OJSC is also among the state-owned companies exporting non-oil products.
According to the Center for Analysis of Economic Reforms and Communications, this JSC exported electricity worth $28.8 million in January of this year.
bp has commenced gas production on the northeast flank of Azerbaijan's Shah Deniz field as part of Stage 2 development of this contractual area, the statement of bp-Azerbaijan (the technical operator of the project) said.
The East North flank consists of five wells, two production manifolds, two new flowlines with a total length of about 30 km, and a number of subsea structures connected to the world-class Shah Deniz reservoir.
"The existing Shah Deniz facilities’ production capacity is currently about 79 million standard cubic meters of gas per day, or approximately 29 billion standard cubic meters per year," the company noted.
Besides, according to bp, as of January 2024, Shah Deniz Field had produced 209 billion cubic meters of gas and 45 million tons of condensate since the start of its development in 2006. In 2023, 26 billion cubic meters of gas were produced from the field, representing a four percent increase compared to the 2022 figure.
As earlier reported, wells on the western, southeastern, southwestern, and northeastern flanks will be completed and gradually commissioned by 2027.
Giulia Chierchia, bp's Executive Vice President for Strategy, Sustainability, and Ventures, explored the role bp may play in assisting Azerbaijan's endeavors in the energy transition and the execution of energy projects in Baku on February 27 and 29.
"Chierchia's agenda for her working tour includes a meeting with bp personnel in the region to gather information on the company's current regional business position. The talk will include security, performance, strategy, and energy transition," the bp statement noted.
A source familiar with the matter said last week that a regular standard batch of liquefied natural gas (LNG) based on the contract between Azerbaijani SOCAR Trading and Pakistan LNG Limited (PLL) won't be delivered to Pakistan in March.
“Pakistan hasn't formed a government yet after the parliamentary election. This influenced the absence of a request from PLL for the LNG batch for March, as the implementation of any contracts must be approved by government agencies,” the source explained.
Italian Ansaldo Energia supports Azerbaijan's development in the energy transition, highlighting improvements in the implementation of the relevant energy project in Mingachevir, said CEO and General Manager of the company Fabrizio Fabbri during his visit to Azerbaijan last week.
"I visited Azerbaijan with Claudio Taffuri, the Italian Ambassador, and Baba Rzayev, the President of Azerbaijan. During our tour, we looked around the Mingachevir combined cycle power plant, where Ansaldo Energia is currently installing two gas turbines. Our commitment to this project corresponds with Azerbaijan's goal of accomplishing an energy transformation," Fabbri said in his social media account.
A source at the Ministry of Mining and Energy of Serbia noted that through the country, Azerbaijani gas can now reach other countries in the region and the EU.
“Serbia became more actively involved in the Southern Gas Corridor project at a later stage, but we worked expediently to become part of this large value chain that helps participating countries improve their energy security and conditions for economic growth. Until recently, Serbia had only one source and two directions of natural gas supply," the source said.
"Following the completion of construction and commissioning of the Serbia-Bulgaria Interconnector in December 2023, we gained the opportunity to connect to the Southern Gas Corridor via the Bulgaria-Greece interconnection. By connecting to the Southern Gas Corridor, the Republic of Serbia diversifies its supply routes and connects to gas sources from the Caspian region and the Middle East, as well as to the LNG terminal in the Greek port of Alexandroupolis,” the source explained.
Azerbaijani Minister of Energy Parviz Shahbazov met with Trans Adriatic Pipeline (TAP) AG Managing Director Luca Schieppati on February 29.
"We evaluated the processes implemented related to the gradual expansion of the pipeline, hydrogen, renewable gas supply, and the achievement of carbon neutrality," the minister wrote on his page on X.
The parties expressed satisfaction with the exportation of 33 billion cubic meters of Azerbaijani gas to Europe through TAP since its inception in December 2020.
Shahbazov also received a delegation led by International Finance Corporation (IFC) Regional Director for Infrastructure and Natural Resources in Europe, Latin America, and the Caribbean, Cheryl Edleson Hanway.
The sides discussed the current cooperation in the energy sector, including the use of offshore wind energy. The parties expressed confidence that cooperation would be successfully continued in the future.
At a meeting with a delegation led by TAQA Executive Director for Transmission and Distribution Networks, Omar Al Hashimi, prospects for cooperation in the fields of modernization of power grids and long-distance energy transmission were discussed.
The 10th meeting of the Advisory Council on the Southern Gas Corridor (SGC) and the 2nd Green Energy Advisory Council Ministerial Meeting were held on March 1, 2023.
Azerbaijani Energy Minister Parviz Shahbazov wrote on X that "these meetings this year were characterized by a wide range of high-level participants, great interest in our projects ensuring regional energy security".
According to the minister, there were productive discussions on energy transition and strengthening energy partnerships.
"Meetings in the framework of the Advisory Council contribute to our initiatives of green growth and diversification of energy supply in Europe through clean sources," he noted.
The meetings brought together delegations from 23 countries as well as representatives of international financial institutions.
Deputy Assistant Secretary for the Bureau of Energy Resources of the US State Department, Kimberly Harrington, took part in the 10th meeting of the Southern Gas Corridor Advisory Council and discussed Azerbaijan’s important role as COP29 host with the country's representatives.
"The US certainly supports the expansion of the Southern Gas Corridor and certainly supports Azerbaijan and the EU agreeing to double gas exports," she said.
The official mentioned that the US sees the Southern Gas Corridor as obviously foundational to achieving that goal.
"European energy security is only bolstered by diversification and enhanced routes like the Southern Gas Corridor. We really want to make sure that our partners and allies are not subject to the weaponization of energy, as we have seen. We've seen more interconnectors come online in Europe recently, including the interconnector Greece-Bulgaria, through which Azerbaijani gas is flowing," Harrington emphasized. "The more Azerbaijani gas gets to more parts of Europe, the better as far as we're concerned. That connector is operating in an area where Russia had a near monopoly before. We'll continue to really support these efforts. And we think this expansion of Azerbaijani gas is going to make a difference for a lot of countries."
The State Department representative noted that the Southern Gas Corridor formed the basis for the creation of the Bureau of Energy Resources.
"The Bureau of Energy Resources serves at the nexus of energy security, decarbonization, and energy access for the State Department. One of our first projects that we really pushed and that was foundational to the creation of our bureau was the Southern Gas Corridor. We always say that Azerbaijan is in the DNA of our bureau, and it truly is. Now, between the ministerial and Azerbaijan hosting COP, these two foundational goals are centered here in Baku. It's really delightful to be here. The US government is very proud of the role that it has had for over a decade in supporting the Southern Gas Corridor and, of course, its final stages of becoming fully operational in 2020," she said.
The European Commissioner for Energy, Kadri Simson, said at the plenary session of the 10th Ministerial Meeting of the Southern Gas Corridor Advisory Council and the 2nd Ministerial Meeting of the Green Energy Advisory Council that Azerbaijan continues to be a reliable partner of the EU in the field of gas supplies.
According to her, increased dialogue and collaboration among trusted partners are required to achieve energy security and success in the energy transition during this critical decade.
"Since Azerbaijani gas began flowing to the EU at the end of 2020, there has been a steady increase, approximately 46 percent higher than the initial 2021 volumes. Last year, we received over 11 billion cubic meters of stable and secure gas supplies from Azerbaijan, and we are actively working to extend these numbers further," she said.
Simson pointed out that there is a collective ambition to increase gas supplies from Azerbaijan, which includes increasing supplies to 20 bcm by 2027.
At the same time, according to the EU commissioner, Azerbaijan's potential goes beyond natural gas.
"We are ready to expand our partnership to electricity markets. The Caspian Sea has enormous wind potential, and renewable electricity coming from Azerbaijan will help Europe meet its energy goals by cutting CO2 emissions. So, this MoU signed today sends a clear message to EU businesses and investors who want to mobilize our technological capacity. This will be mutually beneficial," she noted.
Simson also added that, as Azerbaijan will be the next host for COP29, the EU is ready to cooperate with Baku on its successful outcome.
Albania's Deputy Prime Minister and Minister of Infrastructure and Energy, Belinda Balluku, said during the plenary session of the 10th ministerial meeting of the Southern Gas Corridor Advisory Council and the 2nd ministerial meeting of the Green Energy Advisory Council on March 1 that the country is well positioned to utilize the Trans Adriatic Pipeline (TAP), and First Deputy Prime Minister of Georgia, Levan Davitashvili, noted that his country is dedicated to maintaining an active dialogue with Azerbaijan on the Southern Gas Corridor.
"The South Caucasus Pipeline, along with the TANAP and TAP projects, stands out as some of the most successful energy initiatives worldwide. These projects serve as great examples of mutually beneficial collaboration between recipient countries, backed by the US, European nations, international financial institutions, and companies. Georgia is dedicated to maintaining an active dialogue with Azerbaijan, Türkiye, other participants in the Southern Gas Corridor, EU representatives, and stakeholders to ensure the comprehensive development of the Southern Gas Corridor initiative," he said.
On March 1, Slovenia's Minister of Environment, Climate, and Energy, Bojan Kumere, said that the country chose Azerbaijan as a key strategic partner in diversifying energy supplies.
"Gas has always played a crucial role in Slovenia's and Europe's energy mix, particularly in the industrial sector," he emphasized during the 10th Ministerial Meeting of the Southern Gas Corridor Advisory Council.
Bulgaria's Deputy Minister of Energy, Iva Petrova, said that the Southern Gas Corridor stands out as a prime example of solidarity and cooperation.
Petrova pointed out that achieving an energy transition is not possible without ensuring both national and international energy security.
"This foundation should be built on robust regional solidarity and collaboration within the realms of green energy corridors," she added.
Deputy Minister of Environment and Energy of Greece Alexandra Sdoukou said at a plenary session during the 10th Southern Gas Corridor Advisory Council Ministerial Meeting and the 2nd Green Energy Advisory Council Ministerial Meeting that Greece is working on the expansion of the Southern Gas Corridor (SGC) by increasing the Trans Adriatic Pipeline (TAP) capacity by 2027 while also constructing or modernizing export infrastructure. Examples are the LNG facility in Alexandroupolis and pipelines connecting Bulgaria and North Macedonia.
State Secretary at the Ministry of Mining and Energy of Serbia, Veljko Kovacevic, said that the country may triple its gas supply from Azerbaijan.
"After completing the Serbia-Bulgaria Interconnector, we've signed a deal with Azerbaijan for the supply of 400 million cubic meters of gas annually until 2026, with the possibility of tripling that volume afterward," he explained.
State Secretary of the Croatian Ministry of Economy and Sustainable Development Ivo Milatić said at the plenary session on the SGC that "over the coming months, we must speed up work with our partners, particularly Albania, Montenegro, and Bosnia and Herzegovina, for the IAP initiative, under support by the State Oil Company of Azerbaijan (SOCAR).
Azerbaijani Energy Minister Parviz Shahbazov said during a press conference following the 10th Southern Gas Corridor Advisory Council Ministerial Meeting that Azerbaijan and the EU will cooperate in the field of offshore wind energy.
According to him, the attendance of delegations from 23 countries at the South Gas Corridor meeting underscores Azerbaijan's crucial role in ensuring energy security for the European Union.
"It marked the largest gathering in the event's history, with the highest attendance of energy companies and international financial institutions. The sixth ministerial meeting on the establishment of the Azerbaijan-EU Green Corridor witnessed crucial decisions being made," he said.
Shahbazov also noted that Azerbaijan's gas exports in 2024 will exceed 24 billion cubic meters, up from 23.8 billion cubic meters in 2023, signifying an expanding geography for Azerbaijani gas supplies.
At the mentioned press conference, he further said that the expansion of the SGC will be carried out depending on market needs.
He pointed out that Azerbaijan has sufficient resources for expansion, with current requirements determined by exports.
Shahbazov recalled that starting January 2026, the capacity of the Trans Adriatic Pipeline (TAP) will be increased by 1.2 billion cubic meters.
"The measures undertaken to boost production, including projects like 'Absheron', deep gas initiatives at 'Azeri-Chirag-Gunashli', 'Umid Phase-2', and 'Karabakh', serve as clear indicators that Azerbaijan remains a dependable partner for the EU amidst current geopolitical conditions," the minister noted.
Hungarian State Secretary for Security Policy at the Ministry of Foreign Affairs and Trade, Péter Sztáray, said during his visit to Baku that investments will be undertaken to bring Azerbaijani gas to more Central and Southeastern European countries.
He noted that Hungary has always supported the construction of the SGC, and expanding its capacity is critical not only for Hungary and Central and Eastern Europe but for the entire European continent.
A source at the Bulgarian Ministry of Energy said that Bulgaria is interested in increasing gas supplies from Azerbaijan to the EU.
“Azerbaijan is a strategic economic partner of Bulgaria and an important source for diversification of natural gas supplies to our country. With the commercial operation of the Greece-Bulgaria Interconnector (IGB) as of October 1, 2022, Bulgaria has effectively become an integral part of the strategic infrastructure of the Southern Gas Corridor, thus helping to strengthen the diversification of natural gas supply sources and routes for European countries. Providing conditions for an increase in gas supplies from Azerbaijan to the EU, a main topic of the forthcoming meeting, is a matter of huge interest to us,” said the source.
The source emphasized that Bulgaria hopes for gas imports from Azerbaijan.
Besides, according to the source, the two countries can explore the huge potential of hydrogen production.
“We are convinced that the joint efforts in the field of research, development, and application of hydrogen technologies could not only contribute to energy security but also contribute to global efforts to reduce carbon emissions,” noted the source.
Details of talks held between President of SOCAR Rovshan Najaf and Chairman of the Russian PJSC Gazprom's Board Alexey Miller were also revealed last week.
According to a source familiar with the matter, the negotiations between the leaders of SOCAR and PJSC Gazprom aimed to agree on a number of working aspects of long-standing cooperation, and one of these points was seasonal gas swap operations between Russia and Azerbaijan.
A source familiar with the matter noted last week that SOCAR and the Shah Deniz consortium have started negotiations with Türkiye's BOTAS to extend the agreement on gas supply to Türkiye via the Baku-Tbilisi-Erzurum (BTE) pipeline, as the existing four-year mid-term contract expires at the end of 2024.
The negotiations concern the preparation of new agreements regarding the supply of about three billion cubic meters of gas per year via BTE, explained the source.
On March 1, Katerina Papalexandri, bp’s vice president of gas and low-carbon energy growth, Caspian gas growth, said that the first production well for deep gas at the Azeri-Chirag-Gunashli (ACG) block in Azerbaijan can be drilled in the second half of 2024.
She added that the drilling will be conducted from the West Chirag platform.
Speaking about Shah Deniz Field, Papalexandri noted that the field's facilities can produce about 79 million standard cubic meters of gas daily.
"Just two weeks ago, we started up the remaining fifth flank on Shah Deniz—East North, with plans to activate two more wells from this flank during the year,” she said.
Papalexandri pointed out that there is data from one of the deepest exploration wells in the Caspian, SDX-8, reaching almost 7,000 meters below the seabed.
"We are looking at potential new sources of gas beyond Shah Deniz,” she added.
Commenting on the amendments introduced by the Cabinet of Ministers to the "Excise rates on excisable goods imported into the territory of the Republic of Azerbaijan" document, Doctor of Economic Sciences Professor Elshad Mammadov said that the Azerbaijani government attempts to curb the possible growth of fuel prices in the country by reducing excise rates on gasoline with an octane number less than 95 and excise rates on gas oil.
The excise tax rate on gasoline with an octane number less than 95 is reduced from 200 manat to 1 manat (from $118 to 60 cents) per ton until December 31, 2024, and the excise tax rate on gas oil, including diesel fuel, is reduced from 80 manat to 1 manat (from $47 to 60 cents) per ton.
"Dependency on imports persists for various types of oil products. Undoubtedly, the government is making efforts to safeguard economic stability and predictability by curbing price escalation, given that fuel prices significantly influence various cost components and act as a stimulating factor for an inflationary surge," Mammadov said.
In his view, the Cabinet of Ministers' decision is anticipated to use fiscal measures to counterbalance the potential adverse effects of Azerbaijan importing certain quantities of oil products, particularly as the ongoing modernization of the Heydar Aliyev Oil Refinery is not yet finalized.
Azerbaijani Minister of Energy Parviz Shahbazov took part in the 7th summit of the Gas Exporting Countries Forum (GECF) in Algiers on March 2.
The event discussed the latest trends in the global gas market and discussions on the role and development of gas resources.
The Azerbaijani minister spoke about the functioning and plans for the Southern Gas Corridor and green energy projects.