Page 7 - FSUOGM Week 47 2022

FSUOGM COMMENTARY FSUOGM

Relaunch of Russian gas supplies

to Azerbaijan raises questions

about Baku-Brussels deal

Azerbaijan may end up sourcing extra Russian gas to fulfil its EU supply commitments.

AZERBAIJAN RUSSIA’S Gazprom announced on November for mid-winter peak demand. However, the
18 it would deliver up to 1bn cubic metres of nat- resumption of Russian gas imports now also
WHAT: ural gas to Azerbaijan between now and March raises additional questions, considering that
Baku has resumed under a new contract with the latter country’s Azerbaijan has recently committed to pumping
Russian gas purchases. state-owned oil firm SOCAR. more gas to Europe, in order to offset the loss of
Gazprom was a supplier of gas to Azerbaijan its own Russian supply.
WHY: between 2000 and 2006, but then the country In a statement to Azeri news agency APA,
Azerbaijan often faces rapidly expanded its own gas production at the SOCAR said it had a long history of co-operation
a winter domestic gas BP-operated Shah Deniz field, allowing it not to with Gazprom, and that the two companies “are
supply squeeze, but the only cover its own gas needs but export supplies trying to optimise their infrastructure by organ-
resumption of Russian to Georgia and Turkey. With much of its gas ising the mutual exchange of gas flows.”
gas supplies this year contracted to foreign buyers, Azerbaijan then Azeri gas supplies to Europe via the Southern
comes after Baku pledged turned back to Russian supplies in 2017-2018, Gas Corridor (SGC) had been set to reach the
to provide more gas to only to cease purchases again after the second contractually agreed 10 bcm per year this year.
the EU. stage of Shah Deniz’s development flowed its first And under a memorandum of understand-
gas in 2019. ing (MoU) signed between Baku and Brussels
WHAT NEXT: Azerbaijan has long prioritised the sale of in July, the Azeri side has pledged to ramp up
Azerbaijan has significant its gas overseas over home needs, in order to exports to 12 bcm in 2022.
potential to ramp up maximise export revenues, and this has led to Both Brussels and Baku praised the new
exports to Europe using it contending with a domestic gas squeeze. The deal as an expansion of the energy relationship
its own gas resources. deal with Gazprom comes as Azerbaijan braces between the EU and Azerbaijan. The European

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