The Current State of Azerbaijan's Gas Cooperation with Europe: Opportunities and Challenges - 4

Several key projects have been implemented to create the infrastructure for exporting Azerbaijani gas to the EU market. In early 2007, the Baku-Tbilisi-Erzurum gas pipeline (with an annual capacity of 8.2 billion cubic meters) was launched within the framework of the 690-kilometer South Caucasus Pipeline to facilitate the export of Shah Deniz gas to Georgia and Turkey. In 2011, Azerbaijan and the European Commission signed a Joint Declaration on the Southern Gas Corridor (SGC) project. Notably, in September 2014, the foundation for the 'South' Gas Corridor (SGC) project was laid at the Sangachal terminal, a location of paramount importance in the gas export process.

Azerbaijan's Shah Deniz and ACG fields, the pillars of the country's remaining hydrocarbon resources, are currently operating at a steady pace.

This article provides a comprehensive analysis of Azerbaijan's energy cooperation with Europe. It covers the supply of fossil fuels (oil and gas) and green energy, examining both retrospective and prospective dimensions. The analysis includes production levels, transport infrastructure, potential opportunities in this sector, and challenges, calling for further investigation. The article also assesses possible development scenarios and prospects for gas, oil, and renewable energy sources in Azerbaijan's energy sector.

Although the decrease in oil production in Azerbaijan since 2012 is often attributed to natural processes, it is not the only factor reducing the country's resource revenues. One of the factors contributing to the reduction in resource revenues is the increase in transportation, operational costs, and capital expenditures. The rise in these costs is linked not only to the profitability of project execution but also to the significant impact of global inflation indicators influenced by the COVID-19 pandemic and post-pandemic processes, which have reshaped the economic landscape.