Five years of reliable partnership - Azerbaijani gas as a pillar of EU energy security

It was on this day, December 31, 2020, that commercial supplies of Azerbaijani gas began via the Southern Gas Corridor, in particular through the Trans-Adriatic Pipeline (TAP). On the last day of the year, the first commercial gas from Azerbaijan entered the gas distribution networks of Italy, Greece and Bulgaria. Luca Schiepatti, Managing Director of TAP, called this event historic, not only for the project itself, but also for the countries through which the pipeline passes, as well as for the European energy landscape. According to him, TAP has become an integral part of the continent's gas system and has contributed to shaping the European energy strategy.

The path to this event was long and gradual. The TAP laying ceremony took place on May 17, 2016 in Thessaloniki, Greece, and on November 15, the pipeline was connected to Italy's SNAM Rete Gas (SRG) gas distribution network. With the launch of TAP, the construction of the Southern Gas Corridor has been fully completed.

At the same time, special attention should be paid to the fact that neither the global pandemic nor the 44-day war prevented the implementation of the SGK. As a result, at the end of 2020, Azerbaijan entered the European gas market, making serious adjustments to the energy map of the region. The launch of SGC provided the country with direct access to the EU market, while at the same time providing the European Union with the opportunity to diversify its sources of supply of "blue fuel" and reduce the risks associated with the lack of alternatives.

Azerbaijan's strategic importance in this process has also been recognized internationally. Thus, in the declaration signed on February 20, 2019 following the fifth meeting of the Advisory Council of the Southern Gas Corridor, Azerbaijan's key role in ensuring safe, sustainable and competitive energy supplies to Europe was recognized. Even earlier, in September 2017, the head of state approved the strategy for the development of the country's oil and gas industry until 2050.

President Ilham Aliyev reiterated these priorities during his official visit to Slovakia in December. The Head of State stressed that Azerbaijan's rich resource base already allows exporting natural gas to many countries around the world.

"The number of countries purchasing Azerbaijani gas has reached fourteen. We are ranked first as a country exporting gas through pipelines. As a result of the development of new gas fields, additional resources will be obtained, and, of course, it will be possible to supply even larger volumes of Azerbaijani gas to both Slovakia and its neighboring countries. Currently, our total gas exports amount to 25 billion cubic meters, half of which are transported to European countries. Today, eight European Union member states ensure their energy security by purchasing Azerbaijani gas," President Ilham Aliyev said.

It should be noted that in 2024, Azerbaijan exported a total of 25.2 billion cubic meters of gas, which was 5.8 higher than in 2023. Azerbaijani gas exports to Europe increased by 8.6 percent last year, reaching 12.9 billion cubic meters.

Touching upon the topic of gas during the III Shusha Global Media Forum, the President of Azerbaijan stated that the volume of exports will reach 33 billion cubic meters per year by 2030. According to him, Azerbaijan plans to increase natural gas production by 8 billion cubic meters by this date.

"Yes, we know that Europe needs more gas from Azerbaijan now, and we are ready, we are really increasing natural gas supplies to Europe. In 2021, this figure was 8 billion, now it is 13 billion cubic meters. This is half of our total gas exports. But for additional volumes, European institutions need to show a pragmatic approach to the green agenda," Ilham Aliyev said.

In order to increase exports of much-needed gas to the European Union, an expansion of the relevant infrastructure is required. And the expansion of infrastructure, in turn, requires investments. Meanwhile, according to the new EU rules, European banks no longer finance projects in the oil and gas sector. As a result, there is a dissonance between Europe's real gas needs and its unwillingness to finance related projects.

Baku has repeatedly pointed out this situation and noted that it requires a realistic approach. Azerbaijan has gas, but it will start developing new fields only if long-term contracts are signed and the European Union finances the expansion of the gas transportation infrastructure on its territory.

Recently, the international rating agency S&P Global Ratings issued a forecast regarding oil and gas production in Azerbaijan. Along with a slight decrease in oil production in 2026, the agency predicts that gas production will remain stable. In the longer term, "several gas production projects (including the next phase of Absheron, production from deep-lying formations at ACG, and the development of Umid, Babek, and Karabakh fields) can support gas production, although all of them are in the early stages of planning and will take years to complete.", - noted in the forecast.

According to domestic forecasts, gas production is projected at 48.437 billion cubic meters in 2026, 47.923.7 billion cubic meters in 2027, 45.666.7 billion cubic meters in 2028, and 48.62.6 billion cubic meters in 2029. In January-October 2025, gas production in Azerbaijan amounted to 42.13 billion cubic meters, including commercial gas production of 32.26 billion cubic meters (an increase of 1.7 percent).

As I mentioned earlier in an interview with Day.The head of the Azerbaijan Petroleum Research Center (CNIA), Ilham Shaban, said Azerbaijan has sufficient gas reserves. The country faithfully fulfills all its contractual obligations. By the end of this decade, the Southern Gas Corridor will reach its full design capacity. Azerbaijan will sell more than 20 billion cubic meters of gas to Europe. By this date, the resources of the Shah Deniz-1 project will be exhausted. There are specific contractual obligations for Shah Deniz-2 until 2046, and we can say that by 2050 the resources of this project will be exhausted, the expert noted.

The total proven reserves of the Shah Deniz field are estimated at 1 trillion cubic meters. The Absheron field contains 350 billion cubic meters of gas, 50 of which will be used annually for 30 years to meet the country's domestic needs. The remaining 300 billion under the Absheron-2 project will be exported. It is expected that the implementation of this project will begin by the end of this decade. There are also Umid and Babek gas fields. The Babek structure supposedly contains 400 billion cubic meters of gas.

So, let's emphasize once again: Azerbaijan has gas, it is enough to provide alternative supplies to the European Union until the EU-designated 2050, when it is going to completely abandon fossil fuels.

As for the complete abandonment of fossil fuels, these plans are already creating certain problems for European countries. I think they will eventually bring the European Union back to reality and force it to approach the issue of decarbonization more sensibly and realistically.