"Azerbaijan is putting more emphasis on gas particularly after we had our pick oil from ACG fields. The last huge gas contract was TANAP plus TAP project expected to deliver 6 bcm to Turkey and 10 bcm to Italy respectively. The first gas from Shahdeniz 2 will enter Turkey in 2018 and Italy in 2019. Apart from this field operated by BP, Absheron field discovered by Total also seems to be promising enough and as per Total’s report the first gas is projected to come out of the ground in 2022.There are several other fields such as Shafag-Asiman which will be jointly explored and developed by BP and SOCAR.
Hence, we are now increasingly focusing on natural gas and we have a number of huge competitors like, Russia, Iran, Iraq (including KBR), East Mediterranean, etc. Although Turkmenistan has much higher reserve figures, it is not a challenging competitor as it has not yet found an access to Europe and is primarily selling to China.
So far the only reasonable corridor to Europe is to transfer gas through the proposed Trans-Caspian-Pipeline (TCP) which is actually in favour of Azerbaijan as well, rather than challenging it. But this project is still under a big question due to political (geographical) issues. So, even though the European demand is falling and Azerbaijani gas is land locked not being able to be liquefied and sold to other consumers on the globe, the main point of the European energy security agenda which is to lessen the Russian dependence as much as possible is enough for us not to worry much about the future of our gas exports. Even in the worst scenario cases we can also use LNG options by liquefying our gas in the existing or proposed liquefaction plants in Mediterranean costs of Turkey.
However, when talking about the future, the oil price issue should not be underestimated either. Except the UK and partially Norway and Netherlands, European gas prices are oil-indexed. Therefore, had this level of oil prices remained for a long period, it might affect future developments in Azerbaijan including Total’s Absheron project due to commercial feasibility.
Generally, we are optimistic about the future of our gas." What do you think? Are you optimistic about the future of Azerbaijani Gas? Let us know your views below.
The latest developments of the TANAP and TAP projects as well as the role of Azerbaijan in the global gas industry will be discussed at Gastech in October. Follow the banner to know more.
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