BAKU, Azerbaijan, August 7. The World Bank Group has approved a $15 million project aimed at detecting and repairing gas leaks in the gas distribution network of the “Azerigas” Production Association, as well as reducing methane emissions in Azerbaijan.
This was announced in a statement by the World Bank Group.
According to the statement, the main objective of the “Azerigas Gas Leak Detection and Repair Facility” project is to reduce methane emissions resulting from leaks in the gas distribution network operated by Azerigas, as well as to strengthen the company’s asset management capabilities.
The World Bank notes that the project will establish a special financial mechanism to detect and repair gas leaks. In the initial phase, this mechanism will be funded by a grant from the Global Flaring and Methane Reduction Fund (GFMR).
SOCAR will serve as the grant recipient and the holder of the grant accounts and the financial mechanism. In turn, PO “Azerigaz” will be the sole beneficiary of the grant and will be responsible for the day-to-day implementation and management of the project.
Funds will be transferred in stages from SOCAR to PO “Azerigaz” to implement the agreed-upon measures for identifying and eliminating gas leaks.
Annual gas leaks total 160 million cubic meters
The World Bank notes that there are significant gas leaks in the gas distribution network of the company “Azerigas,” primarily from old facilities that are more than 50 years old.
According to preliminary estimates, the volume of gas leaks amounts to about 160 million cubic meters per year, which is equivalent to 107,000 metric tons of methane emissions per year.
According to the analysis, approximately 80% of the leaks can be eliminated within 7 years through relatively simple and cost-effective measures.
The World Bank estimates that these measures will prevent greenhouse gas emissions of approximately 2.4 million metric tons of carbon dioxide equivalent per year.
The project will be based on the results of a pilot program to determine baseline gas leak levels, implemented by Azerigas in Baku.
Measures to eliminate gas leaks will be proposed and implemented by Azerigas in accordance with pre-agreed criteria. The selection of measures will take into account costs, technical complexity, impact on emissions, and other relevant criteria.
Funds saved from gas losses will be reinvested
A key element of the project is the reinvestment of a significant portion of the funds saved from eliminating gas leaks into a new financial mechanism.
According to the World Bank, this approach will make it possible to mobilize additional financial resources and carry out a more extensive rehabilitation of Azerigaz’s assets.
In addition, funds from the GPRFGM (Global Partnership for Reducing Flared Gas and Methane) and, at a later stage, the financial mechanism, will be used to strengthen Azerigaz’s capacity in the area of monitoring, reporting, and verification (MRV) of emissions. These activities are expected to be carried out in accordance with the OGMP 2.0 standard for methane emissions management in the oil and gas sector.
The World Bank believes that the GPRFGM grant will enable Azerigaz to implement measures that would otherwise be impossible due to limited financial resources and to significantly reduce methane emissions over the course of this decade.
The project will receive $15 million
According to the World Bank, the project is expected to receive $15 million in funding.
SOCAR is the project implementer, and Azerigaz is the borrower. The project is scheduled for completion on October 1, 2029.
The project was announced on January 28, 2026, and approved on August 6, 2026. The project is included in the World Bank’s “Europe and Central Asia” regional portfolio.
