IRIA News

The European Union (EU) has signed a new gas deal with Azerbaijan to double imports of gas from Azerbaijan to at least 20 billion cubic meters annually by 2027 as the bloc is looking for alternatives to Russian gas to secure its future supplies.

European Commission president Ursula von der Leyen and Azeri President Ilham Aliyev met in Baku on July 18 and signed a memorandum of understanding that opens “a new chapter in our energy cooperation with Azerbaijan, a key partner in our efforts to move away from Russian fossil fuels”, said von der Leyen.

EU is not only strengthening its existing partnership with Azerbaijan but also “laying the foundations of a long-term partnership on energy efficiency and clean energy, as we both pursue the objectives of the Paris Agreement. But energy is only one of the areas where we can enhance our cooperation with Azerbaijan and I look forward to tap the full potential of our relationship” she added.

Ursula von der Leyen emphasized three points from the agreement:

1. EU will double the supply of gas from Azerbaijan to the EU from the current 8 billion cubic meters of gas per year to 20 billion cubic meters in a few years.
2. EU is laying the ground for solid cooperation in renewables with Azerbaijan which has tremendous potential in renewable energy.
3. Recognizing the importance of the Global Methane Pledge that requires its signatories to reduce methane emissions collectively by at least 30% by 2030, the MoU sets out commitments to reduce methane emissions throughout the entire gas supply chain.

Beyond energy, the EU and Azerbaijan are discussing the expansion of bilateral cooperation. European Commission president said the EU wants to further enhance investments in Azerbaijan. “We are investing EUR 60 million of EU funds in Azerbaijan until 2024. And the Economic and Investment Plan has the potential to mobilise up to EUR 2 billion in additional investments. It is already at work, supporting about 25,000 Azeri small and medium companies, and making the Port of Baku a sustainable transport hub.”

“Azerbaijan has already increased the natural gas deliveries to the EU and this trend will continue, with up to 4 billion cubic meters of additional gas this year and volumes expected to more than double by 2027. But our cooperation goes beyond that, accelerating the deployment of renewables and addressing methane emissions; these steps will both increase the security of supply and help achieve our climate goals,” EU’s energy commissioner, Kadri Simson, said in a statement.

The new MoU on a Strategic Partnership in the Field of Energy signed by the two Presidents today includes a commitment to double the capacity of the Southern Gas Corridor from more than 8 billion cubic meters to deliver at least 20 billion cubic meters to the EU annually by 2027. This will help Europe to end its dependency on Russian gas.

Long-term energy partnership

Azerbaijani President Ilham Aliyev said that the EU is his country’s major trading partner and energy remains the key area of cooperation between the EU and Azerbaijan. Addressing a joint press briefing, President Aliyev explained the newly signed document is the outcome of the 15-year-long active energy cooperation between the sides. The document followed the previous strategic partnership agreement signed in 2006 and Joint Declaration on Southern Gas Corridor signed in 2011. 

“Energy projects initiated by Azerbaijan and supported by the European Union, and supported by our partners completely changed the energy map of Europe. We started with oil production, gas production, and constructing an oil pipeline that connected Caspian with the Black Sea and the Mediterranean. Of course, the Southern Gas Corridor, a 3,500 km long integrated pipeline system that brings our gas to the European continent” he said. 

The Southern Gas Corridor (SGC) improves the security and diversity of the EU’s energy supply. Traversing seven countries, six regulatory systems and stretching across 3,500 kilometres, the SGC is considered one of the most complex gas value chains ever developed. 

Azerbaijan is one of the few countries that export crude oil, natural gas, petrochemicals, oil products and electric energy. Most of Azerbaijan’s hydrocarbon production comes from offshore fields in the Caspian Sea. The country is a major oil and gas supplier for European markets.