Baku Energy Forum - Azerbaijan boosts gas production in 2017-21

Azerbaijan boosts gas production in 2017-21



Gas production in Azerbaijan increased by about 73 percent from 2017 to 2021, the international rating agency S&P Global Ratings has reported.

The agency noted that this figure will increase by another 20 percent by 2025.

“However, even taking into account the growth of production, in the medium term, gas exports will play a relatively small role in the economy of Azerbaijan and will be about 20 percent of hydrocarbon exports,” the statement said.

Over the past period, Azerbaijan has become not only a supplier but also a reliable transit country.  As a result of the country's policy, Azerbaijan became a recognized member of the international community, proved itself as a reliable international partner, became a guarantor of European energy security, and laid the foundations for regional leadership. Azerbaijan also, having built an export pipeline reaching Europe, has shown that it is capable of large-scale projects.

Since the commissioning till 1 February 2022, more than 191 billion cubic meters of gas was extracted from "Azeri-Chirag-Gunashli", and nearly 160 billion cubic meters from "Shah Deniz". During this period, more than 110 billion cubic meters of gas were exported from Shah Deniz.

In addition, against the background of the recent world events, Azerbaijan and its energy resources are extremely needed for Europe.

Gas supplies to Europe

Energy Ministry international cooperation department head Orkhan Zeynalov told Asia Times that Azerbaijan plans to increase gas supplies to Europe to 9.1 billion cubic meters by late 2022.

“In 2021, 8.2 billion cubic meters of natural gas was exported to Europe, and in 2023 it is expected to supply 11 billion cubic meters to the European markets. As the country’s energy capacity shifts to renewable energy sources, new volumes of gas will be released for export,” he said.

Azerbaijan important player for Europe’s energy security

Azerbaijani MP Javid Osmanov told local media that Azerbaijan plays an important role in ensuring Europe’s energy security.

“Azerbaijan has become an important player in ensuring Europe’s energy security as a result of the balanced policy which is pursued by Azerbaijani President Ilham Aliyev,” he said.

Noting that along with oil, Azerbaijan is already exporting gas to Europe via the Southern Gas Corridor, he stressed that the country’s positions in the European gas market are being strengthened.

“There is no doubt that the supply of Azerbaijani gas to Europe will grow. High-ranking EU officials have also repeatedly expressed gratification with cooperation with Azerbaijan,” he added.

Exceeding the expectations

Energy expert Ilham Shaban told local media that at this stage, Azerbaijan is clearly fulfilling its contracts and exceeding the expectations of European consumers.

“Thus, last year we delivered 8.1 billion cubic meters of gas to European markets. This year, despite the fact that we have declared 9 billion cubic meters, we will reach our projected capacity of 10 billion cubic meters. That is, we are increasing deliveries,” he said.

Shaban noted that the implementation of the second phase [of SGC development] will depend on applications and many other things, and will require additional gas volumes.

“It may be, for example, a couple of billion cubic meters from Dostlug field after the development of it begins. It could also be gas from Absheron in the future, the proven recoverable reserves of which are 350 billion cubic meters. There is also Babek field, estimated reserves of which are 400 billion cubic meters and Umid field with reserves of at least 200 billion cubic meters,” he said.

“No matter how much gas is used for the domestic needs of the country, there is still a considerable amount of gas left for export to foreign markets,” the expert added.

Southern Gas Corridor

Another MP Elshan Musayev told local media that the Southern Gas Corridor is a unique global industrial project that provides Azerbaijan with the opportunity to independently export its gas to the European markets.

He added that Turkey and Georgia, as well as Italy, Greece and Bulgaria rapidly became consumers of Azerbaijani gas.

“The consumers from Albania, Montenegro, Bosnia and Herzegovina and Croatia will also be able to use Azerbaijani gas through the Ionian-Adriatic pipeline in the future, which will become the northern branch of TAP. A corresponding infrastructure is being already created in this sphere,” he said.

Musayev added that Azerbaijan is ready for new realities in the field of production, consumption, sale and processing of natural gas.