Azerbaijan - guarantor of southern Europe's energy security Prospects of the country's major gas projects

For almost three years Azerbaijani natural gas has been exported to Italy, Greece, and Bulgaria, and this year supplies have been organised to Romania and Hungary. The day before, the 170-kilometre Nis-Dimitrovgrad - Bulgaria-Serbia Interconnector Gas Pipeline (IBS) connecting the gas transmission systems of Bulgaria and Serbia was put into operation. The new interconnector will start supplying Azerbaijani gas to Serbia in 2024, and it is also planned to expand gas supplies via the Southern Gas Corridor (SGC) system to other southern European countries. Azerbaijani President Ilham Aliyev arrived in the Serbian city of Nis to participate in the ceremony dedicated to the launch of IBS.

In recent years, Azerbaijan has been consistently fostering business cooperation with the Balkan countries as part of a long-term export strategy for gas supplies. In particular, from December 31, 2020, Azerbaijani gas has been exported to Italy, Greece, and Bulgaria, and from January 2023 to Romania. This July the first pilot delivery to Hungary took place. This strategy is aimed at ensuring Europe's energy security and is based on the Memorandum on Strategic Partnership in Energy signed between Azerbaijan and the European Union in July 2022. The document envisages a doubling of Azerbaijani blue fuel exports to more than 20 billion cubic metres by 2027-2028, which will increase the coverage of new countries with Azerbaijani gas supplies.

To achieve these goals, work is underway to increase gas production in Azerbaijan and expand the capacity of the South Gas Pipeline System, in particular its most important component, the Trans Adriatic Pipeline (TAP). At the same time, Azerbaijan's partners - the states of Southern and Eastern Europe - have been modernising compressor stations and gas distribution networks for the second year already, and the construction of new interconnectors has been accelerated. Recently, one of such projects - construction of the IBS interconnector - was completed, and on the eve of this event, in mid-November, SOCAR and Srbijagas companies struck a deal on the supply of about 400 million cubic metres of Azerbaijani gas per year at the first stage.

Serbian Minister of Mines and Energy Dubravka Djedovic-Handanovic said during a ceremony in the city of Nis that the Serbia-Bulgaria gas interconnector had been a long-planned project, but work on the project had been accelerated recently and would be completed during 2023.

"Thanks to the efforts of all contractors and other participants in the construction, 109 kilometres of pipes have been laid in Serbia in such a short time, gas metering stations have been built, etc. Currently, the main source of gas for this pipeline is Azerbaijan, and we have signed a contract for the supply of 400 million cubic metres of gas until 2026, and starting from 2027, the volume of supplies can be tripled," Djedovic-Handanovic said.

According to the Minister, in the future, if necessary, the capacity of the gas pipeline can be expanded to 3.2 billion cubic metres, which will almost fully satisfy Serbia's gas demand. The head of the Energy Ministry also stressed that the project will further deepen Azerbaijan-Serbia strategic relations in the energy sector, and thanks to the excellent relations between the countries and presidents, Serbia will strengthen its position as a key regional gas transit country.

The interconnection of the Bulgarian and Serbian gas transmission systems, which took place on December 10, makes Serbia the sixth European buyer of Azerbaijani gas, and with the IBS interconnector's design capacity of about 1.8 billion cubic metres per year, it will be possible to export Azerbaijani gas to other neighbouring countries.

"Last year, the European Union and Azerbaijan signed a Memorandum of Understanding on strategic partnership in the energy sector, according to which Azerbaijan should double the volume of gas supplied to Europe by 2027. Figures show that we are confidently moving towards this goal: in 2021 our gas supplies to Europe amounted to a little over 8 billion cubic metres, this year the volumes will reach about 12 billion cubic metres, which is 50% of the total export of Azerbaijani gas," Azerbaijani President Ilham Aliyev said, speaking in the Serbian city of Nis at the solemn ceremony of launching the interconnector.

The head of state also reminded that the SCC - a large-scale infrastructure project with a length of 3,500 kilometres - makes a huge contribution to the energy security of Europe. It is no coincidence that the European Commission (EC) and its high-ranking officials regard Azerbaijan as a reliable partner and pan-European gas supplier. President Ilham Aliyev cited the Azerbaijani-Bulgarian cooperation on the gas track as an example: in particular, within the framework of gas supplies to Bulgaria, which started two years ago, 270 million cubic metres of gas was exported in 2021, last year - just over 500 million cubic metres, and this year this figure will approach one billion cubic metres.

President Ilham Aliyev also noted that Azerbaijan plans to expand the number of European countries to which it supplies gas in the future: "Our plans are related to expanding the geography of gas exports to European countries through new interconnectors".

In this regard, the head of state said that Azerbaijan positively received the EC's request to increase gas supplies to the European continent in connection with anti-Russian sanctions. In particular, for 2023 the total gas export from Azerbaijan is planned at the level of 24.5 billion cubic metres, of which more than half will be directed to Europe. At the same time, Azerbaijan is making maximum efforts to expand hydrocarbon production, including blue fuel to meet growing external demand.

"Foreign investment in fossil fuel projects in Azerbaijan will continue as the country has huge resource potential and there is a strong demand for Azerbaijani gas in Europe. And this demand is constantly growing," President Ilham Aliyev said earlier in an interview with Euronews.

EU Ambassador to Serbia Emmanuel Jofre also spoke about Azerbaijan's significant role in ensuring the energy security of the Old World during the events in the city of Nis. "The EU is very pleased that with the opening of the IBS interconnector Serbia has gained access to energy resources from alternative sources, in particular gas from Azerbaijan. This will not only serve the development of the Serbian economy, this project is a strategic initiative for the whole EU," the EU ambassador to Serbia said, emphasising the special role of Azerbaijan in ensuring the energy security of European countries, which is a reliable partner of the EU in this field.

Bulgarian President Rumen Radev, who took part in the events dedicated to the commissioning of the interconnector, expressed a similar opinion, emphasising Azerbaijan's important role in diversifying gas supplies to South-Eastern Europe.

"The Serbia-Bulgaria interconnector is extremely important for us, as it allows the country to access 6-7 LNG terminals, including from Alexandroupolis terminal in Greece, which will allow Serbia to further strengthen its energy security in the future. The interconnector will provide diversification and access to alternative sources, which is very important for Serbian regions such as Nis," Serbian President Vucic said after the ceremony.

Within the framework of the events in the city of Nis, the President of Azerbaijan held one-on-one meetings with the heads of Serbia and Bulgaria, during which, in addition to the gas track and the Ring of Solidarity initiative, the prospects for cooperation in other energy areas, including the implementation of the Black Sea Energy initiative, were also discussed.