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Rystad Energy: Southern Gas Corridor, LNG to play important role in diversification

15 February 2020 [19:16] - TODAY.AZ

By Trend

Southern Gas Corridor (SGC), which envisages transportation of Azerbaijani gas to Europe and increasing availability of liquefied natural gas (LNG) will play an important role in diversification going forward, Ole Hvalbye, markets analyst at Rystad Energy, the independent energy research and consulting firm headquartered in Norway, told Trend.

Hvalbye noted that the Southern Gas Corridor comprises a network of gas pipelines feeding gas from the Shah Deniz phase 2 field in Azerbaijan to Europe through South Caucasus Pipeline (SCP), Trans Anatolian Pipeline (TANAP) and the Trans Adriatic Pipeline (TAP).

"Transported volumes are expected to reach roughly 16 billion cubic meters (Bcm), where 6 Bcm is going to Turkey and 10 to South-Eastern Europe via TAP and Italy. TAP is currently under construction with a preliminary estimation to start-up in October 2020. Azerbaijani gas will be a good contribution to Turkey and nearby European countries (Greece, Bulgaria, and Romania, etc.)," said the analyst.

Also, Hvalbye pointed out that the SGC will contribute to Turkey becoming a regional energy hub for the South Eastern European countries looking for alternatives, such as Azerbaijani gas.

"There is little doubt that gas will continue to be more and more important as an energy source for Europe going forward. An additional 10 Bcm feed into the European market from another source is of interest as Europe would need all the gas it can get, and cheap piped gas is a lucrative alternative," said the analyst.

The SGC and the increasing availability of LNG will play an important role in diversification going forward, according to Hvalbye.

"Turkey which has been among the biggest importer of Russian gas in 2018 (~24 Bcm), reduced its import volumes by roughly 34 percent in the first nine months of 2019 as compared to 2018 due to more gas supplies from Azerbaijan and LNG imports. Turkey is not the only country looking to diversify away from a single supplier - countries in southeast Europe such as Greece and Bulgaria have also started to look towards LNG and other sources to import gas," noted the analyst.


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