BAKU, Azerbaijan, Jan.13. Possible links to Europe via Azerbaijan will be very critical and crucial to EU’s energy supplies in future, Cyril Widdershoven, a Middle East geopolitical specialist and energy analyst, a partner at Dutch risk consultancy VEROCY, and Global Head Strategy Risk at Berry Commodities told Trend.
“In principle the total looks very positive, as demand for natural gas will be high, especially if China will be back in the market the coming months. Any demand from China will increase pressure on LNG exports to EU, so other sources will be needed for a very long time. Azerbaijan, and possible links to Europe via Azerbaijan will be very critical and crucial to EU’s energy supplies in future,” he said.
Widdershoven believes that prospects are good, but should not be overestimated from the start.
“As we all know, first production of a field is still way below full potential of these fields. At the same time, it needs to be fitting into the existing pipeline capacity, so if not available on short-term, new pipeline capacity is needed, and the latter will take a long time (2-5 years). Overall, any additional capacity will be needed, so on demand side there is no concern,” he added.
The expert pointed out that for the coming 5-10 years, demand will be existing for natural gas.
“Even if all renewable plans will be put in place, delays are too be expected, as materials, availability and potential nimby issues will be existing. For the EU main driver should be to get long-term contracts, as this is the only option driving markets. Any other option or dream existing in the EU or Brussels is a fallacy,” he concluded.
Azerbaijan started gas supplies to Europe on December 31, 2020 via the Southern Gas Corridor. The Trans Adriatic Pipeline (TAP), the European leg of the Corridor, is set to pump 10 billion cubic meters of gas per year, with possible expansion to 20 billion cubic meters. In July 2027, Azerbaijan and EU inked a memorandum on cooperation in energy to double the volume of gas supplies to Europe.
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