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Azerbaijan as energy hub of Europe: from diversification to irreplaceability

Oil&Gas Materials 6 January 2026 12:57 (UTC +04:00)
Azerbaijan as energy hub of Europe: from diversification to irreplaceability
Laman Zeynalova
Laman Zeynalova
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BAKU, Azerbaijan, January 6. The role of Azerbaijan in ensuring Europe's energy security has undergone a qualitative transformation in recent years. Initially, the country was viewed primarily as one of the alternative sources and routes for energy resource supplies, but today Azerbaijan has effectively become one of Europe's key, and even irreplaceable, energy partners.

At the stage of forming the Southern Gas Corridor, it was primarily considered an element of diversification—a way to reduce Europe's dependence on a limited number of suppliers and routes. However, even then, Azerbaijan took on much broader responsibility, not just as a gas supplier, but as the initiator and guarantor of creating a sustainable transregional energy infrastructure linking the Caspian region with Europe. The implementation of the Southern Gas Corridor became proof that Baku is capable of fulfilling large-scale, long-term commitments, ensuring supply stability even amid global turbulence.

A qualitatively new role for Azerbaijan emerged after February 2022, when Europe faced an unprecedented energy crisis. Amid a sharp gas shortage and rising prices, it was Azerbaijan that quickly supported countries that suddenly faced the threat of energy instability. Baku not only ensured the fulfillment of all existing contracts but also expressed its readiness to increase supplies if necessary, once again confirming its reputation as a reliable and responsible partner.

As President of Azerbaijan Ilham Aliyev said in an interview with local television channels on January 5, Azerbaijan's gas exports are growing with respect to both volume and geography.

"So far, we have supplied gas to 14 countries, 11 of them on a regular basis. There are countries that received our gas in 2024 but then stopped because of other sources. It is kind of on demand: whenever they need it, we start supply; when they do not need it, we cut it. Overall, Azerbaijan supplies pipeline gas to 14 countries, with plans to add two more European countries this year. So in total, it will be 16, and this is the largest number with respect to pipeline gas. No other country in the world supplies pipeline gas to as many countries as Azerbaijan," the head of state noted.

Such figures clearly reflect the uniqueness of Azerbaijan’s position in the global energy market and confirm its transition from being an alternative supplier to a systemic player. Moreover, the country has all the necessary resources for further expanding exports. The start of gas production from the deep-water part of the Azeri-Chirag-Gunashli field, the implementation of the Shah Deniz Compression project, and the development of the Babek and Absheron fields are expected soon.

The next stage in developing the giant Shah Deniz field is the $2.9 billion Shah Deniz Compression project. Its main goal is to ensure gas production from reservoirs with low reservoir pressure, making them accessible for exploitation and achieving maximum gas recovery. The project is expected to allow for the additional extraction and export of about 50 billion cubic meters of gas and nearly 25 million barrels of condensate.

In the second phase of the Absheron field development, peak production will reach 12.7 million cubic meters of gas per day, equivalent to 4.5 billion cubic meters per year, and 37,000 barrels of condensate per day. The start of production in the second phase is planned for late 2028–early 2029.

Preliminary estimates suggest that the reserves of the promising Babek structure may reach 400 billion cubic meters of gas and 80 million tons of condensate, significantly strengthening Azerbaijan's long-term export potential.

At the same time, the country is actively developing the green energy sector, which allows for optimizing the internal energy balance and freeing up additional volumes of natural gas for export. Azerbaijan demonstrates a realistic and pragmatic approach to the energy transition, understanding that a complete refusal of fossil fuels in the short term is impossible without serious risks to energy security. Both individual countries and entire regions view investments in traditional energy alongside the development of renewable energy sources as necessary for their stability.

As President Ilham Aliyev stated, countries rich in oil and gas are demonstrated by countries like Azerbaijan and many others that have abundant oil and gas resources but also invest in green energy.

"So I think there is also an understanding now in European institutions that this mania against fossil fuels should end and that pragmatism and realism should prevail," the head of state said.

In this context, it becomes particularly important to revise the approaches of international financial institutions that have actively promoted the refusal to fund fossil fuel projects in recent years. Practice has shown that without investment in gas infrastructure, it is impossible to ensure either the stability of energy supply or a consistent transition to 'clean' energy, and such decisions should not be made at the expense of energy security.

An important direction for further development is green energy corridors, which organically complement the existing gas infrastructure and form the basis for exporting 'clean' energy. They include the Caspian–Black Sea–Europe, Central Asia–Azerbaijan, Azerbaijan–Türkiye–Europe, and Azerbaijan–Georgia–Türkiye–Bulgaria routes. These projects enhance Azerbaijan's role as a key link between regions and markets.

Thus, Azerbaijan, which was initially considered a source of diversification of routes and energy resource supplies, is now an irreplaceable partner for Europe and beyond. In the future, this role will only strengthen, becoming more complex due to a combination of reliable gas supplies, infrastructure development, and the export of 'clean' energy.

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