Energy Minister: “Prices are rising for some gas contracts of Azerbaijan”

"The price of natural gas is very high in the European market. We are currently selling our gas in this direction," Energy Minister Parviz Shahbazov told Report.

"We have various contracts on the export of Azerbaijani gas. Prices for some of these contracts have indeed risen sharply. Of course, this is beneficial for Azerbaijan. But we think that if there are more stable prices in the gas market in the long run, it will be good for us and for the world economy," he said.

Azerbaijan exports gas to Georgia, Turkey, Italy, Greece and Bulgaria. In the first ten months of 2021, Azerbaijan transported nearly 15 billion cubic meters of gas to these countries via the Southern Gas Corridor.

In the first nine months of the year, Azerbaijan exported 3,995.4 million cubic meters of natural gas worth $1,267.9 million to Italy; 501.7 million cubic meters of gas worth $163.7 million to Greece and 166 million cubic meters of gas worth $25.5 million to Bulgaria. Over the reporting period, Azerbaijan exported 7,832.9 million cubic meters of gas worth $1,206.7 million to Turkey, and 2,261.5 million cubic meters of gas worth $280.9 million to Georgia.

Azərbaycan qazı Türkiyəyə Cənubi Qafqaz Boru Kəməri və Trans-Anadolu Qaz Boru Kəməri (TANAP) vasitəsilə nəql edilir.

In January-September 2021, Azerbaijan exported over 14,930 million cubic meters of natural gas, which is 32% more than the same period last year. Under the report, the total amount of natural gas exported in January-September totaled about $2.95 billion.

At the same time, in October, Azerbaijan and Turkey reached a new deal on natural gas to be valid until the end of 2024. Turkey will receive an additional 11 billion cubic meters of gas via the Baku-Tbilisi-Erzurum pipeline.

In keeping with the five-year contract, the total volume of gas to be pumped to Turkey in the first phase will be 1.6 billion cubic meters. In the coming years, Azerbaijan will deliver 2.4 billion cubic meters, 3.5 billion cubic meters of gas in 2023, and 3.5 billion cubic meters of natural gas in 2024 (when the contract expires).

Under the deal that expired in April 2021, Turkey will receive 6.6 billion cubic meters of gas from the Shah Deniz gas deposit in the Azerbaijani sector of the Caspian Sea via the Baku-Tbilisi-Erzurum pipeline on an annual basis.

Azerbaijani gas is transported to Turkey via the South Caucasus Pipeline and the Trans-Anatolian Gas Pipeline (TANAP).

The Baku-Tbilisi-Erzurum pipeline was built to transport gas from the offshore Shah Deniz deposit to Georgia and Turkey. The pipeline is 980 kilometers long and 42 inches in diameter. The pipeline has a capacity of up to 20 billion cubic meters per year.

As for the sale of Azerbaijani gas to the European Union via the Southern Gas Corridor, in 2021, the volume of exports to Europe may reach 8 billion cubic meters. However, the export of 5-6 billion cubic meters of gas was projected. Gas from Shah Deniz-2 (the peak of total output may reach 16 billion cubic meters per year) is guaranteed by Italy's Edison (acquired the rights from Gas Natural Fenosa in 2017), Shell, Bulgargaz, DEPA, Gaz de France, Hera, Enel, Axpo and Eni.

In 2022, gas supplies to the EU via the Southern Gas Corridor could reach 10 billion cubic meters per year, of which more than 8 billion will go to Italy and the rest to Greece and Bulgaria. Azerbaijan annually sells about 1.5-2 billion cubic meters of natural gas to Georgia. Up to 400 million cubic meters of gas a year is pumped to the Nakhchivan Autonomous Republic through swap operations with Iran..

A total of 10.9 million cubic meters of natural gas was transported to Europe via the Trans-Adriatic Pipeline (TAP) on the first day of the project, which started the flow of natural gas to Europe on December 31, 2020.

TAP can stimulate gas supplies to Southeast European countries through interconnectors to be built in the future. For example, Bulgaria will be able to strengthen supply security by delivering 33% of its natural gas needs through TAP. This, in turn, will increase the penetration of natural gas in the country. TAP's outlets in Greece and Albania, as well as in Italy, also open up opportunities for transporting Azerbaijani gas to other European countries.

As the last segment of the Southern Gas Corridor, TAP, which provides Europe with reliable access to a new natural gas source and is of strategic importance, plays an important role in strengthening Europe's energy security, diversifying supplies and serving decarbonization goals.