By 2024, Azerbaijan intends to redouble gas sale at external and internal markets

Guided by forecasts of the economic development of the country in 2020-2023, the government of Azerbaijan has mapped out an essential rise in gas output and its increased sale at external and internal markets.

Under ASTNA documents, in 2023 it is projected to produce in Azerbaijan approx. 47, 44 bln cubic meters of gas as against 30, 13 bln cubic meters in 2018. In so doing, 37, 18 bln cubic meters fall on tank gas ("blue fuel" to be sold both insideoutside the country) while a last year’s figure stood just at 19,2  bln cubic meters.

It should be noted that last year’s tank gas was distributed as follows: 4,87 bln cubic meters to meet needs of "Azerenerji”; 0,165 bln cubic meters – for Nakhchivan Autonomous Republic of Azerbaijan; 2,5 bln cubic meters for Georgia (1,4 bln cubic meters purchased from SOCAR and transported via Gazimagomed-Gazakh gas pipeline; 1,1 bln cubic meters from Shah-Deniz consortium); approx. 7,5 bln cubic meters for Turkey (from Shah-Deniz); 3 bln cubic meters to meet  needs of the population of Azerbaijan; the rest some SOCAR plants.

If no essential changes occur in supplying "Azerenerji" and country’s population with gas (it yields no considerable gains - just 1,408 bln manats in 2018), gas expert will visibly increase to the public treasury.

Thus, in January-September 2019 Azerbaijan exported approx. 9 bln cubic meters of natural gas totally valued at $1,8 bln, according to State Statistics Committee sale data. Note that annual volume of gas export rose by 72,97%, costs by 76,08%.

It should be realized that the rise in gas out in Azerbaijan till 2024 is due to plans of its export growth.

It should be added that 35,18 bln cubic meters of gas are expected to be produced in the country in 2019, of which 24,35 bln cubic meters are tank gas. Also, gas output in 2020 is planned to reach 37,82 bln cubic meters (27 bln cubic meters – tank gas); in 2021  - 42,833 bln cubic meters (31,85 bln cubic meters – tank gas); in 2022  - 45,58 bln cubic meters, including 34,93 bln cubic meters of tank gas.

It has to be kept in mind that in 2020 Turkey is going to purchase 13 bln cubic meters of gas from Azerbaijan. In turn, Georgia is also minded to increase gas deliveries from our country.

Also, gas deliveries from Azerbaijan to Europe via “Southern Gas Corridor” (SGC) are expected to start later 2020 and thus enable our country appreciably increase output and export of gas.

SOUTHERN GAS CORRIDOR

It should be noted that SGC is made of several segments as follows:

1. those located on the territory of Azerbaijan (exploitation of Shah-Deniz gas fields; second, full-scale stage) and of Georgia (transit);
2. on the territory of Turkey – TANAP gas pipeline, put into operation in June 2018;
3.  on the EU territory - TAP gas pipeline.

According to Parviz Shahbazov, Energy Minister of Azerbaijan, at present, 3 bln cubic meters of Azerbaijani gas from Shah-Deniz-2 have so far been exported via TANAP. In 2020, a figure will stand at 6 bln cubic meters of gas to meet energy needs of Turkey.

The Minister pointed out that the construction of Trans-Adriatic Pipeline (TAP), this last component of SGC project is over by 90%.

General manager of chief foreign affairs department under the Ministry of Energy and Natural Resources of Turkey, Safa Uslu declared on October 24 in Baku that "TAP will be filled with gas in the nearest months ".

He added that "in 2020, TAP will start operating following which transportation of Azerbaijani gas via Turkey through ТANAP will be increased".

What is important to notice is that TAP with its 878 km long will enable Azerbaijan to enter the European gas market for the first time. Note that TAP shareholders are BP (20%), SOCAR (20%), Snam (20%), Fluxys (19%), Enagas(16%) and Axpo (5%).

As for Europe, gas from Shah-Deniz is asked-for by Italy, Greece and Bulgaria (at the initial stage of TAP functioning); however, the number of countries eager to purchase the Azerbaijani gas is growing.

As a transit country in the TAP project, Albania is going to purchase gas in case of SGC expansion.

Deputy Minister of Infrastructure and Energy of Albania, Ilir Beyta told journalists in Baku that "all construction work related to land and marine segment of TAP on the territory of Albania has been over ".

"Since 2020 Albania will not purchase gas within the framework of the first stage of TAP project, since it is in no need of gas, so the country did not sign a gas purchase contract with Shah-Deniz consortium in 2013. However, if a decision on SGC expansion is adopted, Albania would purchase gas within the framework of the second stage. The point is that by this time the gas consumption in the country will reach 1,2 bln cubic meters a year", Ilir Beyta noted.

Of interest is the fact that nearly all countries of Central and South-Eastern Europe showed interest in gas purchase in terms of SGC possible expansion. In this connection the TAP consortium has been engaged in market testing procedures.

It should be acknowledged that over the past 25 years the gas production in Azerbaijan rose by 5 times, including by 30,3% over the past 11 years.

It is worth reminding that the development of new gas fields (in addition to Shah-Deniz with its 1,2-1,5 trl cubic meters reserve) will make it possible to extract additional 2 trl cubic meters of gas and thus gasify the whole of Azerbaijan and increase its export capacities.