Economic

Azerbaijan's role in ensuring the energy security of Europe is very crucial and is increasing, especially at the current stage of the global international political order.

Along with oil, Azerbaijan also exports natural gas to Europe. Currently, this process is carried out through the TANAP and TAP gas pipelines already in operation as part of the Southern Gas Corridor (SGC) project. This is a globally unique industrial project that allows Azerbaijan to export its gas to European markets independently.

Turkiye, Georgia, as well as Italy, Greece, and Bulgaria, have become consumers of Azerbaijani gas in a short period. In the future, consumers from Albania, Montenegro, Bosnia, Herzegovina, and Croatia will be able to use Azerbaijani gas through the Ion-Adriatic pipeline, which will become the northern branch of TAP. In this regard, the establishment of the relevant infrastructure is already underway.

The experience of developing oil and gas fields has repeatedly proven that their reserves are greater than previously considered. From this point of view, there is no doubt about the stability of the growth dynamics of Azerbaijan's gas export. All this shows that Azerbaijan is ready for new realities in the production, consumption, sale, and processing of natural gas. The government of Azerbaijan prefers a flexible strategy in this direction, which creates a basis to minimize possible losses and increase profits in a rapidly changing process.

High-level officials of the European Union have repeatedly expressed their satisfaction with the cooperation with Azerbaijan.

On July 18, Azerbaijani President Ilham Aliyev and European Commission President Ursula von der Leyen signed a memorandum in Baku on cooperation in the energy field. Besides, the document also states the doubling of the capacity of the Southern Gas Corridor.

Azerbaijan will also increase gas supplies to the EU from 8 billion cubic meters in 2021 to an expected 12 billion cubic meters in 2022.

It will help to eliminate interruptions in the supply of Russian gas and substantially improve the security of transportation to Europe. By 2027, the import of Azerbaijani gas is expected to double.

By the end of the year, it is expected that production in the "Shahdeniz" gas-condensate field will reach a peak of 26 billion cubic meters per year. It is planned to maintain these production volumes for a while.

Recall that Shah Deniz is the largest gas field in Azerbaijan. Its reserves are estimated at 1 trillion cubic meters, and most of the exported gas falls on its share. Note that production from the Shah Deniz field last year amounted to 22.7 billion cubic meters of gas, which is 27.1% more than in comparison to 2020.

There are other sources rather than Shah Deniz: These are "Absheron", "Babak", "Umid" deposits. The deepwater part of the long-exploited block of the Azeri-Chirag-Guneshli (ACG) oil and gas field promises hundreds of billions of funds.

However, currently, a decrease in production is observed due to the aging of the field in ACG: Works are carried out in the direction of stabilization of production in the field and the construction of the new production platform (ACE) continues, 73% of construction works were completed so far. It is planned to send the support block of the platform to the sea by the end of this year, and the production will start by the end of next year.

In the fourth term of this year, It is planned to start drilling information well in order to obtain additional information about the gas in the deep layers of the ACG oil and gas field block.

Additional information will be collected regarding the gas in the deep layers with drilling a well and a decision will be made on the direction of work in this field.

Note that in total, the confirmed gas reserves in Azerbaijan are close to 2.6 trillion cubic meters. It means Azerbaijan has the potential to increase gas supplies to Europe and meet the growing domestic demand, including in the territories liberated from occupation. The rapid increase in gas production in the largest gas field in recent years gives ground to say that the country is ready to meet European demand in the near future.