BAKU, Azerbaijan, December 13. With Shah Deniz nearing full production now, Azerbaijani gas output will be up 5-6 percent in 2022, Trend reports with reference to the Atlantic Council.
The existing Shah Deniz facilities’ production capacity is currently about 73 million standard cubic metres of gas per day or more than 26.5 bcma. Reportedly, the field produced 22.62 billion cubic meters in 2021.
“Exports will be up too, roughly unchanged to Türkiye but up for Trans Adriatic Pipeline (TAP) markets Italy, Greece, and Bulgaria. Energy Minister Shahbazov recently talked about 11.5 bcm to Europe, and this looks realistic. Note, TAP volumes recently have been at 12 bcma,” reads the analysis published by the Atlantic Council.
The experts from the Atlantic Council note that with reasonable expectations of a small rise in domestic demand and unchanged underground storage levels, Azerbaijan needs imports to balance.
“Some sections of the Southern Gas Corridor (SGC) can currently handle a little more gas. There is perhaps 4-5 bcma of spare capacity on the sections from Azerbaijan to Türkiye, but precious little thereafter. The EU-Azerbaijan MOU of July 2022 to take exports from the current 12 bcma to 20 bcma will require investment in compressors and, perhaps, some parallel pipelining (looping). The costs remain unknown but can be reckoned in billions of dollars or euros. TAP has already announced market test plans for 2023 to see whether suppliers are prepared to commit volumes for throughput that would justify the expansion costs,” reads the analysis.
“On production, Azerbaijan has a long list of potential offshore gas developments: Absheron, ACG Deep, Shah Deniz Stage 3, Shafag Asiman, and SOCAR’s Umid/Babek. At present, the only ones actually proceeding are SOCAR’s own Umid block, which is already producing at around 1-2 bcma, and the 1.5 bcma Apsheron Stage 1, although SOCAR sources say that discussions with Absheron’s operator, France’s Total, for full field agreement are very close to completion and that an agreement could be concluded early in 2023. If so, this should add 3 bcma to Azerbaijani export-focused output in or around 2026.
SOCAR hopes to produce up to 5 bcma from its Babek field while SOCAR sources say discussions on ACG Deep are “on track” and that the field, considered capable of producing up to 5 bcma, could start to come on stream in 2027-28. bp, the operator, is engaged in discussions with SOCAR on enhancing production at Shah Deniz, but there is no indication concerning either the volumes or timeframe for any increase in output.”
The supply of Azerbaijani gas to Europe through the Southern Gas Corridor began on December 31, 2020. Azerbaijan exported its natural gas to the European market through pipelines for the first time in history.
The Trans Adriatic Pipeline (TAP) which is the European part of the Southern Gas Corridor, annually supplies eight billion cubic meters of gas to Italy and one billion cubic meters of gas to Greece and Bulgaria.
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