BAKU, Azerbaijan, January 16. The suspension of swap deliveries of Turkmen gas to Azerbaijan due to contradictions between the parties regarding the price became known this week. Azerbaijan bought Turkmen gas for the flexibility of its fuel and energy balance at a price of 140–150 dollars per 1000 cubic meters during 2022-23, but for 2024 the Turkmen side raised the price almost 1.5 times. Negotiations on supplies for 2024 have been suspended, a government source told Trend.
It became known that the 10th meeting of the Advisory Council of the Southern Gas Corridor will be conducted in Baku on March 1, within the framework of which the second session on alternative energy will be held. The signing of a number of international agreements is expected, including the gasification of the Albanian city of Korca by SOCAR as well as new projects in the field of RES.
The State Oil Fund of Azerbaijan (SOFAZ) has reported the results of 2023, according to which, in particular, revenues from the sale of gas and condensate from the Shah Deniz field amounted to $1.3 billion, compared to $1.443 billion for the same period in 2022. According to SOFAZ, the fund received $324.3 million from the sale of condensate from Shah Deniz, compared to $328.5 million for 2022. SOFAZ's revenues from the Azeri-Chirag-Guneshli (ACG) field block exceeded $6.8 billion for 2023, up from $9.8 billion for 2022.
The General Development Plan of "Baku" until 2040 has been announced, which in particular provides for the allocation of 4.2 billion manat ($2.4 billion) for the development of renewable energy sources (RES). Thus, the construction of one wind and three solar power plants with a total installed capacity of 1,200 MW is proposed in the areas (sub-centers) of "Baku" - in Alyat, Lokbatan, Sabunchi, and Mardakan - until 2040 (specified in the General Plan). The document also includes the projects "Floating Solar Power Plant" with a capacity of 300 kW on Lake Beyukshor and the natural park "Kirmaki" with an area of 202 hectares (by 2040, it is envisaged to have 676 MW of energy capacity).
The document noted that the projected gas consumption in Baku by 2040 may increase to 1.1 mcm per hour from the current figure of 1 mcm per hour. The existing capacity of Baku's gas network is currently 1.56 million cubic meters per hour. Of the capital's total gas pipeline network of 10,919 kilometers, 2,187 kilometers of gas pipelines are underground. By 2040, some sections of the network may be replaced or new sections will be laid. The gas demand of one household is approximately 9,590 kWh per year. According to research documented in the Baku General Plan, the average gas consumption of one apartment per year at its peak is 0.3 million cubic meters per hour. It is recommended to adapt the infrastructure to new international energy efficiency standards with a parallel increase in the capacity of the heat and electricity transmission and distribution network.
The share of renewable energy sources (RES) in Baku's gross domestic product will amount to two percent by 2040, up from 0.5 percent in 2019, the capital's General Development Plan 2040 says. Based on the forecasts laid down in this document, by 2040, AZN 935 million worth of added value will be created at the expense of RES. The annual average growth rate of this sector in the capital's GDP is expected to be ten percent. It is assumed that by 2040, the RES sector in Baku will employ 6,745 people (at least 2,295 new workplaces will be created).
According to data on Georgia's natural gas balance, it is planned to import 3.217 bcm of natural gas in 2024, of which 3 bcm is from Azerbaijan. Georgia received about 2.5 bcm of gas from Azerbaijan in 2023.
It became known this week that the east-north flank of Azerbaijan's Shah Deniz gas condensate field is expected to start up in early 2024.
International analytical company S&P Global Commodity Insights (part of Standard & Poors) published a report with an assessment of investments in the energy transition in the world (estimates of the previous 18 months). Based on this document, over the period studied, companies in the world have invested a total of more than $500 billion in energy transition projects, taking into account the UN climate agenda. A large inflow of capital, in particular, is seen in the production of batteries and the search for new technologies to make them cheaper. According to S&P Global Commodity Insights, 82 percent of private capital investment in the energy transition over the past 18 months has gone into electrification and renewable energy, while 18 percent has gone into technological solutions to decarbonize heavy industry (which has the highest greenhouse gas emissions).
S&P Global Platts estimates that Azerbaijan's crude oil production for December 2023 amounted to 480,000 bpd, up from 490,000 bpd in November. Meanwhile, the daily quota for crude oil production in Azerbaijan under the OPEC+ deal is 684,000 barrels.
However, the Ministry of Energy of Azerbaijan reported that in December 2023, the daily production of crude oil in Azerbaijan amounted to 482,000 barrels. According to the Ministry of Energy of Azerbaijan, in December 2023, the daily production of crude oil, including condensate, amounted to 604,000 barrels. Of these, 482,000 barrels amounted to crude oil and 122,000 barrels of condensate.
The reputable international analytical agency Moody's believes that moderate growth and soft prices are expected for the world's oil and gas sector in 2024-2025, while global oil demand will not grow as fast in 2024-2025 as in 2021-2023, as economic growth in the world's largest economies will remain slow, which may restrain oil demand.
"Natural gas demand growth will outpace oil demand, driven by emerging market activity and lower liquefied natural gas (LNG) prices. However, large LNG supply flows will constrain gas prices," Moody's analysts forecast.
The US Energy Information Administration (EIA) forecasts that Azerbaijan's oil production in 2025 will amount to 0.65 million barrels per day, and in 2024, it will be 0.61 million barrels per day.
The Trans Adriatic Pipeline (TAP) consortium is planning to start tests in January in connection with its intention to supply hydrogen and plans to complete them by the beginning of the second quarter of 2024, the consortium told TAP AG in response to a query from Trend.
Research conducted in 2021 confirmed that TAP could potentially transport a hydrogen mixture in combination with natural gas.
Construction of two new solar power plants (SPP) with a total capacity of 760 MW will start in Azerbaijan by the end of 2024, and from 2025, work on a wind power plant with a capacity of 240 MW will start, Trend reported with reference to the publication of Azerbaijani Energy Minister Parviz Shahbazov in social network X. He noted that such an agreement was reached following the visit of the UAE President to Baku and the signing of a package of agreements on the development of "green" energy projects.
Electricity generation in Azerbaijan through wind and solar power plants will grow 2.5 times by 2026, a government source told Trend in an exclusive interview.
"We forecast that in 2024 wind and solar power plants in Azerbaijan can provide 669 million kilowatt-hours of electricity, and already in 2025 it is planned to reach the production of 1.664 billion kilowatt-hours. In 2026-2027, the production of electricity at the expense of these renewable sources (RES) will be kept at the level of about 1.6 billion kilowatt-hours per year," the source said.
At the end of 2023, Azerbaijan exported 11.8 bcm of gas to Europe. "Gas exports from January through December increased by 5.3 percent. A total of 11.8 bcm was exported to Europe, 9.5 bcm to Turkey and 2.5 bcm to Georgia. During this period, 5.6 bcm of gas was supplied to Turkey through the Trans-Anatolian gas pipeline," Parviz Shahbazov announced.
Azerbaijan increased gas production by 3.2 percent to 48.3 bcm in 2023, Azerbaijani Energy Minister Parviz Shahbazov posted on social network X. "During this period, 23.8 bcm out of 48.3 bcm of gas was exported," he said. Furthermore, the minister writes that oil production last year amounted to 30.2 million tons, of which 25.2 million tons were sent for export.
Azerbaijan's giant Shah Deniz gas condensate field produced 26.2 bcm of gas in 2023, which is the peak production level. According to the ministry, production at the field since the beginning of commercial development as of January 1, 2024, amounted to 209 bcm, of which 148.1 bcm is exported.
Azerbaijan's Shah Deniz field produced about 4.3 million tons of condensate in 2023, up from 4.4 million tons in 2022.
The Absheron field recovered 0.8 bcm of gas. This field has been developing since July 2023.
At the Azeri-Chirag-Guneshli field block in the Azerbaijani sector of the Caspian Sea, 12.9 bcm of gas was extracted in 2023. Gas production at the block since the beginning of commercial development as of January 1, 2024, amounted to 216.3 bcm.
Azerbaijan's Azeri-Chirag-Guneshli (ACG) block will produce 17.8 million tons of oil in 2023, compared to 20.4 million tons in 2022. The total volume of oil production at ACG since the beginning of commercial development as of January 1, 2024, was 584.7 million tons.
The State Oil Company of Azerbaijan (SOCAR) increased exports of oil and condensate from 1.4 million tons in 2022 to 3.1 million tons in 2023, the annual report of the Ministry of Energy stated.
According to primary data, electricity production in Azerbaijan in 2023 increased by 272.3 million kWh compared to the figure in 2022 and amounted to 29.2 billion kWh, Azerbaijani Energy Minister Parviz Shahbazov announced on his page on social network X. "During this period, Azerbaijan exported 3.2 billion kWh, while imports amounted to 211.8 million kWh," the publication reads.
The Baku Household Waste Recycling Plant processed 531,400 tons of garbage in 2023, a record in the 11 years of the plant's operation. "Due to burning this volume of waste, 222,900 kWh of electricity was generated," the enterprise informed.
Electricity production from renewable energy sources (RES), including hydropower plants, amounted to 2.1 billion kilowatt-hours in 2023, Azerbaijani Energy Minister Parviz Shahbazov informed.
The publication reads that last year, 1.7 billion kilowatt-hours were generated by HPPs, 56.6 million kilowatt-hours by HPPs, 79.4 million kilowatt-hours by SESs, and about 223 million kilowatt-hours by the Solid Waste Incineration Plant (SWIP). It should be noted that the share of the RES sector in Azerbaijan's total electricity production in the reporting period amounted to seven percent.
The Albanian gas service company announced a tender for technical evaluation of the Trans Adriatic Pipeline (TAP). Proposals were accepted until January 12. The project, with an estimated cost of $642,5 million, is scheduled to be completed by September 2025.
During 2023, the volume of transportation of Kazakh oil for export from the port of Aktau amounted to 3.376 million tons, an increase of 1.108 million tons compared to the same period in 2022, KazTransOil reported.
Thus, the increase in the volume of transportation of Kazakh oil for export from the port of Aktau is due to an increase in the volume of raw materials shipped in the direction of the oil pipeline "Baku-Tbilisi - Jeyhan", from 250 thousand tons to 1.3 million tons, which is 5.5 times more compared to the same period of 2022. In particular, 1 million tons of oil were shipped from the Tengiz field in this direction.
Two minesweeping ships of NATO's Second Standing Mine Countermeasures Group worked closely with the Italian Navy and local authorities to monitor the Trans Adriatic Pipeline (TAP) at the bottom of the Adriatic Sea, a source quoted by the organization told Trend. "Regular monitoring of the integrity of critical subsea infrastructure, including pipelines and communication cables, ensures both the transfer of energy resources and the exchange of data between countries. Approximately one-third of natural resources are transported via submarine cables. TAP, which delivers natural gas to Europe from Azerbaijan's Shah Deniz gas field, is crucial for the European Union's energy policy," the report stated.
Azerbaijani delegation to take part in the international energy forum to be held on May 13–14 in Belgrade (Serbia). Serbia has been receiving gas from Azerbaijan since 2024 (an annual volume of up to 400 million cubic meters is planned).
By 2023, 47.1 percent of subscribers (1,199,375 subscribers) of SOCAR's Azerigaz Production Association did not exceed the lower limit of gas consumption effective from October 2021, Head of Gas Control Department of Azerigaz Elchin Gojayev said at an event for media and NGO representatives.
The representatives of Azerbaijani companies took part in the international forum "Roadmaps for Wind Energy Development" held in Izmir on January 12. " During their speeches, representatives from Azerbaijan, in particular, noted that Azerbaijan has a serious offshore wind energy potential of 157 GW, of which 122 GW are floating power generation and 35 GW are stationary.
The reputable European analytical company Cedigaz, in a piece on the state of the world's gas industry, points to the growing interest in the construction of new underground gas storage facilities (UGS) given the volatility of the blue fuel market. "Currently, 76 gas storage projects are being implemented around the world for a total capacity of 55 bcm. A further 99 projects are at the planning and feasibility study stage."