Page 4 - FSUOGM Week 36 2022

FSUOGM COMMENTARY FSUOGM

How much Azeri gas can

head to Europe?

Azerbaijan seems capable of supplying the extra gas, but a lot will depend on continuing
exploration work, financing and whether or not Turkey will turn down the gas.

AZERBAIJAN EUROPE has reached out to Azerbaijan as a To start off, there is the question of how much
source of additional gas supply to eliminate more extra gas supply Baku and Brussels are discuss-
WHAT: of its imports from Russia. But how much extra ing. Under a memorandum signed by the Azeri
The EU wants to double gas the country would be able to provide, beyond government and the European Commission in
Azeri gas supply to 20 the 10bn cubic metres per year it is already send- July, the two agreed on the potential delivery of
bcm per year by the late ing, will depend on results from upcoming an extra 10 bcm per year of gas by 2027, bringing
2020s. exploration work at key fields, and whether Tur- the total to 20 bcm per year.
key waives its first rights to supplies. Let us move on to how much gas the proven
WHY: fields might provide. Garabagh, which is being
The bloc is scrambling Production prospects developed by Azerbaijan’s SOCAR and Norway’s
to obtain alternatives to Currently, all of the gas that Azerbaijan delivers Equinor under a risk service agreement, could
Russian gas. to Europe comes from the Shah Deniz Stage 2 supply 2 bcm per year at plateau, based on its
project in the Caspian Sea. The country has reserves and statements by the Azeri govern-
WHAT NEXT: discovered several more potentially promising ment. This extra volume would only be ready by
A lot will depend on fields, but they are all at varying stages of explo- 2025-26, however.
progress at upstream ration and appraisal. This means there is quite Absheron, developed by a joint venture
projects, and whether some uncertainty about how much extra supply between SOCAR and France’s TotalEnergies,
or not Turkey, which has they could provide. In some cases, only one or could flow 5 bcm per year, but not until after
first rights to extra supply two wells have been drilled into these fields, and 2027. The existing Umid field is currently pro-
via the Southern Gas none of their resources can be counted as proven ducing 1.7 bcm per year and this could be
Corridor, turns it down. or probable reserves. ramped up to 3 bcm. Meanwhile Babek, located
Among the undeveloped finds in the Azeri adjacent to the field, could produce 3-4 bcm per
Caspian, only Absheron, Umid and Garabagh year, according to Azeri state estimates, but like-
are proven. Shah Deniz Stage 3, comprising gas wise not for a few more years.
reserves located beneath those that are already At Shah Deniz Stage 3 and ACG Deep Gas,
in production, are not proven, and neither are the drilling of new wells is due to start this year,
deeper gas layers at the Azeri-Chirag-Guneshli and results from the boreholes will help define
oil project. Neither have resources been proven resource volumes and production potential. But
at the Babek prospect. in any case, it would seem that Azerbaijan has

P4 www. NEWSBASE .com Week 36 09•September•2022