Azerbaijan to boost gas exports to EU by 17% by 2026

Azerbaijan aims to raise gas exports to Europe by around 17% from current levels by 2026, with further increases dependent largely on EU demand and infrastructure developments, Vitaliy Baylarbayov, deputy vice president of Azerbaijan’s state oil company SOCAR, told Montel News, Report informs.

“We are expanding [production and export capacity] now and the results of that should be ready by 2026, when we will further increase our supplies to Italy, Greece and to Bulgaria,” Baylarbayov said at the Budapest LNG Summit.

The country was eyeing gas exports of close to 14bcm to southeast European countries in two years’ time, from 12bcm last year, he said.

The rise would be due to a combination of production growth and capacity expansions on the three transit pipelines that make up the Southern Gas Corridor, which links Azerbaijan, via Türkiye, with Greece and Italy, he noted.

But further increases in Azerbaijan’s supply to Europe would depend largely on the region’s demand requirements and its commitment to invest in new infrastructure, Baylarbayov said on the sidelines of the event.

“For example, we are intending to send an additional 5bcm via the Solidarity Ring to the Balkan countries,” he said, regarding a planned route – for which a memorandum of understanding was signed last year – between Bulgaria, Hungary, Romania and Slovakia.

And “similar volumes” could be additionally shipped via the Southern Gas Corridor to Italy, Greece and their neighbors, he said, adding “this is what we can produce and deliver.”

“I cannot say that this all will come simultaneously, or that this will all come in one and the same year – it all depends on when infrastructure will be ready and when our upstream will be ready,” he said.

But he stressed “certain projects” did not depend on SOCAR, but rather the European customers.

“The decisions in Europe should be made by the Europeans.”

“We are interested in supplying more, [but] it is crucial to have the infrastructure,” he said, adding that Europe would remain Azerbaijan’s primary market for the years ahead.

Azerbaijan started exporting gas to Europe on December 31, 2020. According to the agreement between Azerbaijan and the EU, by 2027, supplies of Azerbaijani gas should reach at least 20 billion cubic meters per year.

At the same time, by the end of 2025, the TAP gas pipeline, as part of the first stage of expansion, will be ready to accept additional 1.2 billion cubic meters of Azerbaijani gas, of which, from 2026, Italy will receive 1 billion cubic meters, and Albania will receive another 200 million cubic meters.

As part of the Solidarity Ring project, on April 25, 2023, a ceremony was held in Sofia to sign a Memorandum of Understanding on the development of cooperation between gas transmission system operators in Bulgaria (Bulgartransgaz), Romania (Transgaz), Hungary (FGSZ), Slovakia (Eustream), as well as SOCAR. The memorandum defines the areas of cooperation between the four transmission system operators and SOCAR for the supply of additional gas from Azerbaijan to Europe. Additional supplies will be carried out through the modernized gas transmission networks of Bulgaria, Romania, Hungary and Slovakia.