Can Azerbaijan Help Europe Kick Its Russian Gas Habit?

Via Radio Free Europe, an article on Azerbaijan’s potential to fill supply gaps caused by Russian sanctions and restrictions:

Russia may be using missiles and bombs in its invasion of Ukraine, but it has another weapon, less lethal but nevertheless threatening, pointed at the rest of Europe — energy.

Amid international outrage over its unprovoked aggression, Moscow finds itself facing a raft of rising sanctions. As it supplies the EU with 40 percent of its natural gas, Russia has fired back. President Vladimir Putin announced that “unfriendly” countries would have to pay for such deliveries in rubles.

The Russian state-owned energy company Gazprom on April 26 announced it had suspended gas deliveries to Poland and Bulgaria and would not restart them until payments were made in the Russian currency, triggering outrage in the EU and accusations of “blackmail.”

Warsaw, which imports some 45 percent of its natural gas from Russia, said it could “manage” with the Russian taps shut. But Sofia, which imports about 73 percent of its gas from Russia, indicated it would face problems.

In an interview with the French daily Le Monde published on April 28, Bulgarian Prime Minister Kiril Petkov disclosed where his country hoped to get some of the missing gas — Azerbaijan. “Very concretely, we hope for help to obtain Azerbaijani gas as quickly as possible,” he said.

Officially, Baku did not comment on Petkov’s remark. At present, Azerbaijan supplies up to 300 million cubic meters of gas a year to Bulgaria, not a significant amount.

For close to two decades, Azerbaijan has been maneuvering to become a significant gas exporter to Europe, culminating in late 2020 with the commissioning of the Trans-Adriatic Pipeline (TAP) carrying Azerbaijani gas through Greece and Albania and across the Adriatic Sea to Italy.

TAP is the final leg of the 3,500-kilometer-long Southern Gas Corridor, which brings gas from Azerbaijan’s giant Shah Deniz II field in the Caspian Sea.

The Southern Gas Corridor was built to diversify the European Union’s gas supply and reduce the number of EU countries that have a single supply source. In 2021, the EU imported a total of 155 billion cubic meters (bcm) of natural gas from Russia, the world’s largest gas exporter.

Most of Azerbaijan’s proven gas reserves, which were estimated at about 60 trillion cubic feet (1,700 bcm) in January 2021, are located in the Shah Deniz field.

While gas from Azerbaijan may help EU states wean themselves off Russian gas, the volumes simply aren’t enough to fully replace it.

“The TAP pipeline, which carries Azerbaijani gas to Europe, and other EU efforts to reduce dependence on Russian gas imports have always been about diversification, rather than fully eliminating and replacing Russian supplies,” explained Alissa de Carbonnel, deputy program director for Europe and Central Asia at the International Crisis Group.

“The idea being that alternative energy sources — however small as a share of the total imports — ensure Gazprom is not in and able to exploit a monopoly hold over any given market,” de Carbonnel said to RFE/RL in e-mailed remarks.

To tap more Azerbaijani gas, Bulgaria is counting on the completion of the gas Interconnector Greek-Bulgaria (IGB), which, as its name suggest, should link the Greek and Bulgarian gas-pipeline networks. When the pipeline is launched, tentatively set for later this year, Azerbaijan will start supplying 1 bcm of gas a year to Bulgaria for the first time.

“The most optimistic forecast is that construction will be completed by July this year. Then tests and other procedures should be performed. To help Bulgaria meet its urgent needs, Azerbaijani gas can be sent as soon as the test is over, and other paperwork can be put on hold. This will help Bulgaria tackle the gas crisis created by Russia, to some extent,” Martin Vladimirov, a Bulgarian energy analyst, told RFE/RL’s Azerbaijani Service.

The pipeline connector will run from the Greek city of Komotini to the city of Stara Zagora in central Bulgaria. The project, estimated at some 240 million euros ($253 million), is funded by participating countries and the EU.

The IGB will offer other possibilities beyond shipping Azerbaijani gas. Petkov has said Bulgaria could take gas from Romania and send it to Turkey as well as back the other way via the IGB, with the hope being that both Bucharest and Sofia could reduce Russia’s pressure on the gas market.

EU And Baku’s Growing Energy Ties

Amid rising regional tensions but before Russian forces launched their full-scale invasion of Ukraine on February 24, Brussels and Baku were discussing ramping up Azerbaijani gas deliveries to the EU.

“We want the volume of gas exported from Azerbaijan to Europe to reach 10 billion cubic meters,” EU Energy Commissioner Kadri Simson said at a press conference after talks in Baku on February 4 with President Ilham Aliyev. Such an increase is important “against the backdrop of shortages and rising prices in the energy market,” she said.

Aliyev said Azerbaijan exported 19 bcm of gas last year. This includes 8.5 bcm to Turkey and 7 bcm to Italy. It also exported gas to Georgia, Greece, and Bulgaria. Energy Minister Parviz Shahbazov said in March that Azerbaijan had 2.6 trillion cubic meters of gas reserves, which he said was “enough for its neighbors and European countries.”

“The expansion of the Southern Gas Corridor project will definitely begin, and in this direction, we have started dialogue with European countries, Western Balkan countries, and other Eastern European countries,” Shahbazov continued.

Azerbaijan exported 2.6 bcm of gas to Europe in the first quarter of 2022 and is expected to increase gas supplies to Europe by 30 percent in 2022.

But even increased Azerbaijani gas exports will only dent the European Union’s Russian gas needs, and, moreover, it is unclear whether Azerbaijan can meet its higher export targets, de Carbonnel says.

“But Azerbaijan’s production has been declining in recent years and it would take time to turn that around, so when TAP says it could double its capacity to 20 bcm per year in a few years’ time, questions remain around what gas will fill the so-called Southern Gas Corridor,” she said.



This entry was posted on Monday, May 9th, 2022 at 6:11 am and is filed under Azerbaijan, Gazprom, Russia.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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