Doubling of Azerbaijani gas supplies to EU - truly significant event

Oil&Gas Materials 19 July 2022 12:45
Doubling of Azerbaijani gas supplies to EU - truly significant event

BAKU, Azerbaijan, July 19. The recent visit of the European Commission President Ursula von der Leyen to Azerbaijan and the signing of a memorandum on doubling the supply of Azerbaijani natural gas to Europe is a truly significant event, Trend reports.

As Mark Twain once said, "History never repeats itself, but it often rhymes."

The current geopolitical game around energy supplies to Europe and the role of Azerbaijan in this process reminds me of the mid-90s of the last century. It started with the signing of the "Contract of the Century" and the construction of the Baku-Tbilisi-Ceyhan pipeline.

However, the value of the current agreement around doubling the supply of Azerbaijani gas to Europe is much higher, since currently, Azerbaijan is not just one of the energy suppliers able to reduce Europe's dependence on the Russian monopoly, but a full-fledged partner, which, at the same time, approached the current energy deadlock in Eurasia in a good shape, with self-sufficiency and constancy of foreign policy priorities.

On July 18, 2022, a “Memorandum of Understanding on Strategic Partnership in the field of energy between the European Union represented by the European Commission and the Republic of Azerbaijan" was signed between Azerbaijan and the European Union.

President of the Republic of Azerbaijan Ilham Aliyev and President of the European Commission Ursula von der Leyen inked the document.

The Sides agreed to support bilateral trade of natural gas, including through exports to the European Union, via the Southern Gas Corridor, of at least 20 billion cubic meters of gas annually by 2027, in accordance with commercial viability and market demand.

According to the document, any further exports of natural gas to the European Union beyond those that are being delivered to date will require significant investments in the expansion of the Southern Gas Corridor pipeline network and the upstream project development.

Moreover, the EU and Azerbaijan will encourage financing of the expansion of the Southern Gas Corridor pipeline network taking into consideration the EU’s climate policies and its REPowerEU strategy, including through cooperation with international financial institutions.

The Sides will also support infrastructure to be conversion-ready with a view to transporting renewable gases, including hydrogen and its derivatives. This entails that new infrastructure should be capable of carrying renewable and low-carbon gases, including hydrogen and its derivatives, as well as making existing infrastructure future-proof and hydrogen ready.

The Sides expressed their aspiration to promote mutually beneficial natural gas trade, anticipating future trade in hydrogen, hydrogen-derivatives and other renewable gases (bio-methane, etc.), and renewable electricity.