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By Trend

Trend’s exclusive interview with Acting Special Envoy and Coordinator for International Energy Affairs at the U.S. Department of State Sue Saarnio.

Intro: "As the Acting Special Envoy for the State Department’s Bureau of Energy Resources, it is my pleasure to discuss energy issues of common interest between the United States and Azerbaijan. Our countries have a longstanding bilateral relationship, with energy playing a key role."

Q: Azerbaijan, jointly with its international partners, is very close to the completion of the Southern Gas Corridor project. How do you assess the progress in implementation of the project and its significance in ensuring Europe’s energy security?

A: The Southern Gas Corridor (SGC) will make a significant contribution to Europe’s energy security. The SGC has made tremendous progress. Development of Azerbaijan’s offshore Shah Deniz 2 (SD2) gas field is nearly complete, as is the expansion of the South Caucasus Pipeline (SCPX) and construction of the Trans-Anatolian pipeline (TANAP). The final pipeline in the SGC, the Trans Adriatic pipeline (TAP), has also made substantial progress, especially in Greece and Albania. The Italian portion, after some initial challenges, is making good progress. We remain confident that gas deliveries to Turkey will begin in 2018 and to Italy in a 2020/21 timeframe.

Q: Various projects are under construction for transporting gas to Europe. What importance do you attach to the Southern Gas Corridor under new conditions, given the EU intention to diversify the energy supply sources?

A: Many EU members recognize that their reliance on a single source of natural gas imports exposes them to serious political and economic risks, and that they should take steps to diminish that reliance by diversifying their gas imports—by country of origin and path of delivery.

While the EU has added LNG infrastructure—both terminals and floating storage regasification units (FSRUs)—the SGC is the only major pipeline project now under construction that will provide a new source and new route for gas delivery to Europe.

This is an enormously significant development and would not have been possible without the concerted and sustained efforts of countless government and private sector stakeholders from Azerbaijan, Georgia, Turkey, Albania, Greece, Italy, the United Kingdom and elsewhere. The U.S. government has strongly supported this project from its inception, much as we earlier supported the Baku-Tbilisi-Ceyhan (BTC) pipeline.

The SGC and BTC are remarkable examples of what we can achieve when we work together toward a common purpose.

The initial phase of the SGC, with gas supplies from SD2, is just the beginning. Under the right circumstances, the SGC could be expanded to deliver additional volumes from Azerbaijan, as well as new volumes from the Eastern Mediterranean and/or Turkmenistan.

The SGC could thus become a basis for positive cooperation across the region, providing a range of gas producers with a stable source of export earnings, while helping to underpin Europe’s long term energy security.

Q: On September 14 Baku hosted the signing ceremony of a new contract on development of the Azeri-Chirag-Gunashli (ACG) block of oil and gas fields until 2050 with participation of two US companies. What is the significance of the deal for the international energy cooperation? How will this agreement affect Azerbaijan’s role as a supplier of energy resources to world markets?

A: Azerbaijan has been supplying large volumes of oil to global markets since completion of the Baku-Tbilisi-Ceyhan (BTC) pipeline in 2006. Extension of the ACG Production Sharing Agreement (PSA) will help ensure that Azerbaijan remains a major supplier of oil to European and world markets.

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