Maroš Šefčovič: “I have no doubts that the current support to SGC will be upheld by the next Commission” - Interview
- 21 May 2019
Interview of the Vice-president for the Energy Union of the European Commission Maroš Šefčovič to ONA.
- What opportunities and prospects open the beginning of supply of Azerbaijan gas to Europe?
- Gas, which currently accounts for 23.4% of the EU’s energy mix, will continue to play a role in the EU’s energy system for years to come as we continue decarbonizing our economy. The EU currently imports 70.4% of the gas it consumes, of which 64.7% comes from two suppliers, Russia and Norway. Due to declining domestic production, the level of imported volumes may further increase in the years ahead. In this contest, gas from Azerbaijan is a key element of the EU’s policy of diversifying gas supply sources, routes and counterparts, which is a central part of the EU’s Energy Union strategy. Gas coming from the Caspian Sea will play a key role in strengthening the security of supply of natural gas to most vulnerable Member States of the EU. The SGC project will also bring numerous opportunities to Azerbaijan and it is one of the concrete examples of the EU’s strong involvement in the region. The EU remains Azerbaijan’s first trading partner, representing 36.2 % of Azerbaijan's total trade in 2017. The EU is also a key foreign investor in Azerbaijan. Over the last 10 years, it invested around 18 billion EUR in Azerbaijan. Currently, around 385 EU companies are doing business in Azerbaijan.
- Which sources does the EU consider to be additional for expansion of suppliers along the Southern Gas Corridor? How do you asses the idea of the connection of Israel or Turkmenistan to this project?
- The SGC is open for gas coming from any source and country that can effectively contribute to the EU’s diversification policy. There is a great potential for additional volumes from many countries of the region, including Turkmenistan and Azerbaijan. The final investment decision will depend on technical and commercial conditions. Technically, we are well positioned as the current capacity of the project could be further increased with relatively low costs. For example, the TAP’s current capacity of 10 billion cubic meters per year could be doubled in a short period of time. It is the market then that should decide if there is a need for these additional volumes of the Caspian gas. Regarding the gas originating in the Mediterranean basin, there are several possible supply routes that are currently being considered. It is important that we choose the most cost efficient option to ensure that the final price of gas coming from that region can be competitive on the EU market.
- How do you evaluate the prospects of Azerbaijan as a supplier of gas to European Market?
- The EU and other partners in the region fully recognise the strategic role of Azerbaijan in designing and developing the SGC. I am confident that Azerbaijan will become for many years a reliable partner and supplier of gas to the EU Member States and outside its borders. It is going to finalize the TAP project for the next year.
- Do you believe that from the net year Europe will receive first gas from Azerbaijan? How do you asses the construction work of this pipeline? The work in Albania already finished. Do you believe that the construction will not confront problems in Italy?
- TAP running through the territory of Greece, Albania, and Italy is a key component of the SGC. Following the successful finalization of the SCPX and TANAP pipelines in 2018, the TAP pipeline is also in the process of being finalized, with 85% being completed to date. Therefore, with good progress of the works, I am confident that the first gas will reach Italy and Greece/Bulgaria in 2020.
- It is going to be a change of leadership of the EU in autumn. Will the new leadership of the EU be committed to this project?
- For the EU, the SGC is a strategic partnership and a long term commitment. The SGC is a key project for the EU’s policy of diversifying gas supplies and enhancing EU’s energy security. Its importance, however, goes well beyond the energy sector. The SGC serves as a unique platform for securing political engagement in other key areas and for ensuring positive developments in countries of the Caspian and Black seas region. Furthermore, let me remind that the EU has provided the project with significant financial support and that the construction of the corridor is based on long-term contracts. I have no doubts that the current support will be upheld by the next Commission.
- Azerbaijan and the EU are going to sign a new agreement about cooperation. What opportunities this agreement will open to extend the cooperation in the energy sector?
- Negotiations on a new bilateral comprehensive agreement between the EU and Azerbaijan are ongoing.The agreement will support Azerbaijan’s efforts to diversify its economy and will also provide a good basis for further cooperation in view of sustainable socio-economic development. Joining the World Trade Organisation would represent a considerable step forward in this regard. The EU will continue to express a positive attitude towards cooperating with and supporting Azerbaijan in all areas of mutual interest, in full respect of all the values and commitments shared by both sides.