Monday, 12 October 2020 09:39

Bulgarian Dnevnik: Natural gas export competition increase on EU market

The Southern Gas Corridor​ worth $40 billion will start filling up with gas from Azerbaijan's huge Shah Deniz II field in the Caspian sea, the Bulgarian Dnevnik writes. The project has the support of the European Commission, as it seeks to limit Europe's dependence on Russian energy resources.

The project also enjoys the support of Turkey which took the side with Baku in the battles which have been the deadliest since the 90s of the last century between Azerbaijan and ethnic Armenians in Nagorno-Karabakh (editor’s note. internationally recognized territory of Azerbaijan).

Military operations have engulfed Azerbaijani cities near the Southern Gas Corridor, but British Petroleum (BP) Azerbaijan, a member of a consortium of companies involved in the project, told Reuters it continues to work as planned.

“Currently, all our business operations in the region continue to run as normal, and our plans remain unchanged”, BP representative said.

Baku has announced today that it is commencing legal proceedings over Armenia's attacks on the country's export infrastructure in the territory where the South Caucasus Gas Pipeline, an integral part of the Southern Gas Corridor, passes.

According to analysts, Moscow has good relations with Armenia and Azerbaijan, as well as pragmatic relations with Turkey — the countries were able to overcome past crises and the difference in positions on Syria.

However, competition for gas sales is particularly undesirable, as the Russian economy has suffered due to falling oil and gas demand caused by covid-19 pandemic.

It is noteworthy that a little more than 10 days since the escalation began, Russian President Vladimir Putin has already discussed the situation several times with Armenian Prime Minister Nikol Pashinyan, while the talks with his Azerbaijani counterpart Ilham Aliyev were held for the first time.

The Central Bank of Russia reports that gas export fell to $ 11.44 billion in the first half of this year, compared with $ 18.65 billion for the relevant period of 2019. This year, Gazprom plans to deliver at least 170 billion cubic meters to Europe (in 2019, exports amounted to 199 billion).

Gazprom's natural gas export to Europe, including Turkey, fell by 18 percent to 78.94 billion cubic meters in the first half of the year. To Turkey alone, it fell by more than 40 percent (to 4.7 billion cubic meters).

Meanwhile, over the past two years, Azerbaijan has delivered almost 7 billion cubic meters of gas to Turkey via the existing TANAP pipeline, part of the Southern Gas Corridor. Turkey will receive 6 billion cubic meters of Azerbaijani gas per year through the fully completed Southern Gas Corridor which is expected to be commissioned at the end of this year, and 10 billion cubic meters will be supplied to Europe.

According to Dmitry Marinchenko, Director of the Natural Resources and Commodities Group at Fitch Ratings, Azerbaijani gas is unlikely to completely replace Gazprom in Europe, but it poses a serious threat. "However, taking into account other factors, first of all, the increase in imports of liquefied natural gas, the start of gas supplies from Azerbaijan will lead to the boost of competition," he told Reuters.


Read 619 times Last modified on Monday, 12 October 2020 09:55