The agreement was announced Azeri energy minister Parviz Shahbazov following his meeting in Washington with US assistant secretary of state for energy, Geoffrey Pyatt.
“We agreed to cooperate on US support for expanding the Southern Gas Corridor [and] considered opportunities to develop traditional energy partnerships at a new stage,” Shahbazov said on X, formerly known as Twitter.
Azerbaijan’s energy ministry also announced that Shahbazov had met with US secretary of State for Energy Jennifer Granholm, and that they had discussed the broader development of US-Azeri bilateral energy cooperation including the supply of gas, green energy and issues related to Azerbaijan’s hosting of COP29, which will be held in Baku in November.
Interest in expanding the Southern Gas Corridor pipeline network through which Azerbaijan exports gas to Europe has surged since the Russian invasion of Ukraine and the curtailment of Russian gas exports to Europe.
In July 2022, Azerbaijan and the European Commission signed an agreement under which Baku would look to double exports to Europe to 20 Bcm/year by 2027.
Azeri gas exports to Europe reached 11.8 Bcm last year, up 3.5% on 2022, with exports to Turkey at 9.5 Bcm and to Georgia 2.5 Bcm.
Expansion restrictions
Expansion currently remains limited both by the capacity of Azerbaijan’s upstream to produce sufficient volumes to meet both growing domestic demand and its exports commitments and the current capacity of the three pipelines that make up the corridor.
BP earlier this month said it expects the first gas output from the deep field below its ACG oil field to be produced in early 2025, and that the gas will be available for export but that it has yet to agree a “production concept” with Socar or give an indication of how much gas it expects to produce.
Further expansion of the corridor to reach the 20 Bcm/year level would also require significant investment which has yet to be agreed between stakeholders in the three pipelines that make up the corridor.
The South Caucasus Pipeline, which transits Azeri gas from Azerbaijan through Georgia to Turkey, has a current capacity of 24 Bcm/year.
Having been expanded once through the addition of a second parallel pipe it’s unclear whether the current capacity can be expanded further through the addition of extra compression or whether it would require a further parallel line.
The TANAP pipeline across Turkey has a current boilerplate capacity of just 16 Bcm/year of which 6 Bcm/year is used to deliver gas to Turkey’s Botas under a legacy deal which expires in 2033.
As yet no agreement has been reached to expand TANAP to its full 31 Bcm/year capacity.
The TAP pipeline that carries Azeri gas from Turkey via Greece, Albania and across the Adriatic to Italy has a current capacity of 10 Bcm/year.
In January last year the TAP consortium announced it would expand capacity by 1.2 Bcm/year by 2026.
David O’Byrne
