Marco Tonegutti: Azerbaijan strengthening strategic role of SGC in gas supplies to Europe

Azerbaijan is strengthening the strategic role of the Southern Gas Corridor (SGC) in gas supplies to Europe, Marco Tonegutti, managing director and senior partner at Boston Consulting Group (BCG), said on March 3 in Baku at the 12th Ministerial Meeting of the Southern Gas Corridor Advisory Council and the 4th Ministerial Meeting of the Green Energy Advisory Council, Report informs.

"Azerbaijan supplies Europe with approximately 13 billion cubic meters of gas per year, representing the only non-Russian pipeline corridor connecting the Caspian region with southern and central Europe," Tonegutti said.

He noted that the SGC is operating at full capacity.

Tonegutti emphasized that Azerbaijan's gas production exceeds 50 billion cubic meters per year. He believes that further increases in Azerbaijani gas supplies to Europe require addressing bottlenecks in both production and transportation infrastructure.

A BCG representative noted that the combination of moderate production growth in Azerbaijan and potential additional gas volumes from the eastern Caspian coast, including Turkmenistan, could further strengthen Europe's energy base.

"Azerbaijan offers the only route that can improve supply security and reduce the EU's dependence on unstable energy markets," he noted.

Tonegutti also emphasized that Europe faces a structural energy security problem: the EU's annual gas consumption is approximately 340 billion cubic meters, and under strong electrification scenarios demand will remain above 300 billion cubic meters by 2030. Nearly 90% of the EU's consumption is dependent on imports, with approximately 45% being LNG, which creates high marginal prices and makes Europe vulnerable to global volatility.

"Scalable and reliable alternatives to Russian gas are extremely few, making the strategic role of Azerbaijan and the Southern Gas Corridor critical," he said.

He added that long-term contracts, financing agreements with international financial institutions, and coordination of political and regulatory mechanisms are necessary for the further expansion of the Southern Gas Corridor.