Energy giants gather in Baku for historic Southern Gas Corridor, green energy discussions Azerbaijani president addresses event

On April 4, the 11th Southern Gas Corridor Advisory Council Ministerial Meeting and the 3rd Green Energy Advisory Council Ministerial Meeting were held at the Gulustan Palace in Baku.

President of Azerbaijan Ilham Aliyev attended the event, Caliber.Az reports via local media.

Parviz Shahbazov, Azerbaijan’s Minister of Energy, said:

- Your Excellency, President of the Republic of Azerbaijan, Mr. Ilham Aliyev, dear Commissioner for Energy and Housing, Mr. Dan Jørgensen, distinguished ministers, dear guests, ladies and gentlemen.

It's my great honor to welcome you to the 11th Ministerial meeting of the Southern Gas Corridor Advisory Council and the 3rd ministerial meeting of the Green Energy Advisory Council. This gathering marks yet another significant milestone in our successful efforts to strengthen the synergy between energy security and energy transition within this framework. I would like to extend my deepest gratitude to His Excellency, President of the Republic of Azerbaijan, Mr. Ilham Aliyev, for his steadfast leadership and unwavering support in driving this success. It's now my distinct privilege to invite His Excellency, President Ilham Aliyev, to deliver the keynote address.

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The President of Azerbaijan addressed the event.

                                Speech by President Ilham Aliyev

- Good morning, ladies and gentlemen, dear guests.

I welcome you all to Azerbaijan. A special welcome to our guest from Brussels. Mr. Commissioner, welcome. This is the first time you are participating in this event. But as we all know, and as I already said, it is the eleventh time that the Southern Gas Corridor Advisory Council has gathered in Baku. Initiated by Azerbaijan and supported by the European Commission, this important gathering has played a crucial role in elaborating approaches to energy security, addressing the issues of energy security, and coordinating our joint efforts. And today, while we had a family photo procedure, I said that we will probably need more space for that because the team is growing. And this is a very good sign of our cooperation. The more time passes, the more countries and companies are involved in the process, united with a common goal. First, to strengthen cooperation, because without cooperation none of the energy security projects would be possible.

And second, to provide energy security for themselves, their neighbors, and their partners. I think the very positive spirit of partnership and cooperation that unites us is a clear demonstration of our responsibility — the responsibility of producers, transitors, and consumers. Of course, the balance of interests between the three major actors of this process, with the support of international financial institutions, made our story — or stories — success stories. Countries, their governments, investors, companies, and leading international financial institutions — this is our team, and the team is growing. It is clear today, more than ever before, that energy security is an integral part of the national security of countries. I would also say that today we can also talk about industrial security, because in order to develop industries, we need energy resources, we need petrochemicals, we need fertilizers. And Azerbaijan is a producer and exporter of crude oil, natural gas, oil products, petrochemicals, and fertilizers.

And our energy company, SOCAR, is involved in upstream, downstream, and midstream activities in Azerbaijan and outside our boundaries. Azerbaijan, for many years, was and will be a reliable partner. And as high representatives of the European Commission noted, Azerbaijan is a reliable partner in the field of energy and a pan-European gas supplier. This is true. The geography of our gas supply is growing. Since our last meeting here in Baku, at the 10th Advisory Council, five more countries have become recipients of our natural gas.

Today, Azerbaijan supplies natural gas to 12 countries — 10 of them are European, and eight of those are members of the European Union. The geography of our gas supply in Europe will definitely grow, because today we are already involved in the creation of gas distribution networks in some European countries. Some of them do not have one, some of them need to expand it, and Azerbaijan, as an investor, is planning to do that. So, the geography of our gas supplies will definitely grow through different ways, including interconnectors.

Of course, we need to think about joint efforts in the expansion of the existing gas pipeline system. The Southern Gas Corridor is a tremendous success story for all of us. The 3,500-kilometer integrated pipeline system today is the main artery for energy security for many countries. And now it is working at full capacity. Whether it’s the South Caucasus Pipeline, TANAP, or TAP — three integral parts of the Southern Gas Corridor — all are fully packed.

So we need to expand. And for that, we will need, of course, financing. And we come to a very important point, which we have raised on several occasions — that international financial institutions, those who decided to stop financing fossil fuel projects, will probably reconsider their policy, especially taking into account the huge geopolitical changes that we all witness. Because without that, any further investments in transportation infrastructure and even in upstream will be very problematic.

We have great experience in combining corporate financing and borrowed money, which made it possible to implement huge projects of production and transportation. ACG, Shahdeniz, Absheron — these are oil and gas fields which today provide energy security for many countries. And many more oil and gas fields will be operational within several years. So, contracts have been signed. The working program has been approved. Construction of pipelines — also the Baku-Tbilisi-Ceyhan and Baku-Supsa oil pipelines, as well as the Southern Gas Corridor — all that was done in cooperation, as I said, by all the actors. So, when the policy to stop financing fossil fuel projects is introduced, it sends a signal to investors, to companies, to countries, which is not positive. So, I think this is an important moment, which will probably be discussed.

We hope that, despite a very ambitious green agenda in Europe, fossil fuel producers — and fossil fuel as an important factor of energy security — will not be forgotten and will not be discriminated. Actually, that was our message at COP29 when Azerbaijan hosted this global international event — that there should be no discrimination, there should be no dividing lines between countries rich in fossil fuels and those who don’t have them. On the contrary, countries rich in fossil fuels that invest in renewables must be praised, not attacked.

So, I think that if this important issue is addressed, it will make the lives of producers easier. At the same time, the long-term contracts process is also important. Because we all know that energy projects — oil and gas — need a lot of investments, and you recover investments over many years. By the way, until today, what we invested in the Southern Gas Corridor as a country has still not been recovered. We still have not reached the zero balance. Therefore, we must be sure that our gas will be needed in Europe, which is our main market, for many more years. If we don’t have this guarantee, investors will not invest, and the country will not invest. So there will be a big shortage of natural gas. Our reserves are known.

We expect new production from new fields this year — primarily from the Azeri-Chirag-Gunashli Deep Gas Structure. And also, we are, I think, in the final stage of reaching an agreement about the expansion of production from the Absheron Field, moving to Phase 2, which will add a minimum of 3 BCM to the existing 1.5.

So, all of this is possible, but it requires, as I said, these two important factors — physical transportation infrastructure through interconnectors and through expansion of the Southern Gas Corridor, and reliable forecasts and reliable partnership. Because in a partnership, all sides must be reliable.

With respect to our green agenda, as I said, we managed to combine these two important factors, satisfying the needs of our consumers.

By the way, since Azerbaijan and the European Commission signed a declaration on strategic partnership in the field of energy, our gas supply to Europe has increased by almost 60 per cent. That declaration was signed by the President of the European Commission and myself in mid-2022. In 2021, our gas supply to Europe was about 8 BCM. Last year, it was almost 13. So, it is more than half of our total export, which is 25 BCM, and which will grow. So, it is a substantial amount already today. Taking into account our plans to engage new fields and also to increase production from existing gas fields, we will definitely have much more gas for our consumers. If we add our green agenda, which will save us a lot of natural gas, we can imagine that Azerbaijan will play an even more important role for our partners with respect to energy security.

Today, already signed contracts with our investors on Solar and Wind Power stations will allow us to have, by 2030, 6 GW of solar and wind energy. As I said, that will save a lot of natural gas, which we currently use to produce electricity domestically, and all of that will be available for export. We are actively developing this ourselves with our own investments. Regarding hydropower potential today in the territories liberated from Armenian occupation — East Zangezur and Karabakh — we have already installed 270 megawatts of hydropower stations. More than 30 small hydropower stations have already been inaugurated, and in the next maximum five years, this number will grow up to 500 megawatts, with an additional 30 small hydropower stations. So, that will eventually, by 2030, create an energy potential of 6.5 gigawatts. And just for your information, today Azerbaijan’s installed capacity is slightly more than eight. So, we will almost double our potential to produce energy from renewables within the next five years.

Of course, today I'm sure that at the session of the Green Energy Advisory Council, the green cable from Azerbaijan to Europe will also be discussed. As far as I was informed, the feasibility study of that project is in the final stage. So, after it is fully completed, the practical negotiations will definitely start again with respect to financing. Of course, we can anticipate that there will be no restrictions on financing the green energy project. But I think it will be important to upgrade these projects within European institutions to projects of common interest — because that is what they are.

So, I will probably conclude now by once again expressing deep satisfaction with the results we have achieved through the active format of our cooperation. Yes, we gather once a year in Baku, but throughout the year there are numerous events, meetings, conferences, and bilateral and multilateral partnership formats, which actually create the synergy. And, as always at the Advisory Council, we review what has been done during the last year and plan our future steps. I wish both councils success.

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A total of 24 countries, including Azerbaijan and the European Union, seven international financial institutions, and 42 energy companies participated in the meeting. The event was attended by ministers, deputy ministers, and other high-level representatives.

After the opening session, the meeting proceeded with three plenary sessions - Ministerial Session, Southern Gas Corridor Session: Progress and Next Steps in Successful Operation and Development of Southern Gas Corridor Plenary Session and Green Energy Projects and Green Energy Corridors Plenary Session.

Under the framework of the Advisory Council, the second Ministers' Meeting on the transmission and trade of green energy between Azerbaijan, Türkiye, Georgia, and Bulgaria was held. An informal Steering Committee/Ministers' Meeting on the Caspian-Black Sea-European Green Energy Corridor also took place, alongside a roundtable on the development of offshore wind energy between Azerbaijan and the European Union.

During the event, several documents aimed at enhancing cooperation in the energy sector were signed.

The ministerial meetings under the Southern Gas Corridor Advisory Council have been held regularly since February 2015.

10:41

Baku is currently hosting the 11th Southern Gas Corridor Advisory Council Ministerial Meeting and 3rd Green Energy Advisory Council Ministerial Meeting at the Gulustan Palace. 

Azerbaijani President Ilham Aliyev is taking part in the event, Caliber.Az reports, per local media.

The meeting brings together representatives from 24 countries, including Azerbaijan and the European Union, as well as 7 international financial institutions and 42 energy companies. Key officials, including ministers, deputy ministers, and other high-ranking representatives, are also in attendance.

Following the opening session, the ministerial discussions will continue with plenary sessions focusing on two main topics: "Southern Gas Corridor: Successful Operation, Progress, and Next Steps" and "Green Energy Projects and Green Energy Corridors."

In addition, there will be two important sub-meetings: the second ministerial meeting on green energy transfer and trade between Azerbaijan, Türkiye, Georgia, and Bulgaria, and an informal meeting of the Steering Committee/ministerial meeting on the Caspian-Black Sea-Europe Green Energy Corridor. A roundtable discussion on the development of offshore wind energy between Azerbaijan and the European Union will also take place.

Throughout the event, agreements on energy cooperation are expected to be signed. A press conference will conclude the 11th ministerial meeting of the Southern Gas Corridor Consultative Council and the 3rd ministerial meeting of the Green Energy Consultative Council.

The ministerial meetings within the framework of the Southern Gas Corridor Consultative Council have been held since February 2015.

By Aghakazim Guliyev