Azernews.Az

By Zara Araz

On August 1, 2024, Azerbaijan marked a significant milestone in its energy export strategy by commencing natural gas deliveries to Slovenia. This development follows a Memorandum of Understanding signed on July 17, 2024, between the State Oil Company of Azerbaijan (SOCAR) and Geoplin, Slovenia’s largest natural gas provider. This agreement underscores Azerbaijan's growing influence in the European energy market and reflects a broader strategy to enhance regional energy security through diversification.

With Slovenia joining the list of European countries receiving Azerbaijani gas, the total number of nations benefiting from Azerbaijan’s blue fuel now stands at nine. This list includes Turkey, Georgia, Italy, Greece, Bulgaria, Romania, Hungary, and Serbia. By the end of 2024, Azerbaijan is poised to surpass this milestone, aiming to extend its gas exports to ten countries. This expansion highlights Azerbaijan’s increasing role as a key energy supplier to Europe, a region historically reliant on Russian energy.

The new partnership with Slovenia is a strategic move for SOCAR, reinforcing its position in the European market and opening opportunities for further collaborations in energy projects. The initial phase of this partnership involves the transportation of Azerbaijani gas, with plans including fuel diversification, extended delivery to other regions, and the establishment of energy sales networks across Central and Eastern Europe.

Azerbaijan’s capacity to meet growing European demand is bolstered by significant increases in its gas production. In the past two years, Azerbaijan's gas production potential has risen by approximately 4-5 billion cubic meters annually. In the first half of 2024 alone, gas production exceeded 25.1 billion cubic meters, with nearly 60% directed towards foreign markets. This amounts to 12.7 billion cubic meters in exports, a 6% increase from the same period in the previous year. Notably, exports to Europe have surged by 10% compared to 2023.

To accommodate the growing volume of gas exports, the Southern Gas Corridor consortium is investing in expanding the Trans-Adriatic Pipeline (TAP). The pipeline expansion, set to increase capacity by 10 billion cubic meters over the next five years, necessitates significant infrastructure upgrades. TAP's first expansion phase, costing 132 million euros, will be completed by 2025, adding 1.2 billion cubic meters of additional capacity. Further expansion plans will aim to elevate TAP’s capacity to at least 25 billion cubic meters by 2027.

Azerbaijan’s gas reserves are substantial, with confirmed reserves of around 2.6 trillion cubic meters, sufficient for at least 100 years of both domestic use and export. This robust reserve base supports Azerbaijan’s role as a long-term energy supplier for Europe. The planned increase in gas production by 40% from 2024 to 2027, coupled with expanded pipeline capacity, will enable Azerbaijan to further extend its supply network to countries such as Slovakia, Moldova, and Austria, potentially covering 40% of the European Union’s energy needs.

Looking ahead, Azerbaijan is also positioning itself to export "green energy" to Europe. Plans are underway to leverage the "Black Sea" corridor to introduce a substantial portion of Azerbaijan's green energy potential, estimated at over 150 GW. This move aligns with Europe's increasing focus on sustainable energy sources and enhances Azerbaijan’s role in the global energy transition.

Azerbaijan’s expanding gas export network signifies a pivotal shift in European energy dynamics, reflecting both the country’s growing influence and the broader trend toward diversification of energy sources. As SOCAR and Geoplin deepen their collaboration, Azerbaijan’s strategic investments in production and infrastructure are set to reshape the energy landscape, ensuring enhanced energy security and stability for Europe in the years to come.

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