According to the Azerbaijani expert Gulmira Rzayeva, senior researcher at the Oxford Institute for Energy Studies, London, in order to achieve its own goals within the framework of the Southern Gas Corridor, Azerbaijan will balance between Turkey’s regional ambitions to create a gas hub and the EU’s need for covering the gas deficit by increasing the import of the Azerbaijani resource to 20 billion cubic meters per year by 2027 (11.4 billion cubic meters in 2022).
The expert confirmed the technical possibility of increasing production at the Azerbaijani deposits by 13-15 billion cubic meters of natural gas during the current year. At the same time, the total cost of expanding the transport capacities of the Southern Gas Corridor is estimated at 8-10 billion euros (construction of parallel lines of gas pipelines and gas compressor stations). It is in the interests of the Azerbaijani side to place the main investment costs on the EU and ensure the conclusion of long-term contracts (for the next 15 years) for the supply of energy resources to the European market.
Turkey is considering the expansion of the Southern Gas Corridor in the context of strengthening its own positions on the regional gas market. The concept of the Turkish gas hub envisages the manipulation of Russian, Azerbaijani and self-produced gas flows (LNG regasification) in order to ensure liquidity and expand transport capacities in the direction of the European market.
Currently, the Turkish side operates within the framework of the following long-term contracts:
with Russia – in the amount of 21 billion cubic meters per year in the period 2022-2025; with a volume of 5 billion cubic meters per year in the period 2026-2043;
with Azerbaijan – with a volume of 7 billion cubic meters per year in the period 2022-2033;
with Iran – in the amount of 10 billion cubic meters per year in the period 2022-2026;
with Algeria – with a volume of 3 billion cubic meters per year in the period 2022-2024.
Within the framework of the current contract for the supply (transit) of Azerbaijani gas, Turkey can use the provisions of the agreement regarding the priority right to purchase energy resources and “will take all available gas” in the event of an increase in the volume of pumping in the European direction.
The Azerbaijani expert believes that the leadership of his country will be able to reach an agreement with the Turkish side regarding the possibility of direct access to the European gas market. In particular, by offering gas at a price that will not be competitive for Turkey’s industrial consumers.
