On February 3, Baku will host the 9th Ministerial Meeting of Southern Gas Corridor Advisory Council. Officials and representatives of countries and companies participating in this project or intending to do so in the future, who arrived in Baku, will discuss the issue of further expansion of this gas artery, originating in Azerbaijan and delivering gas from the Shah Deniz field to Turkish and European markets. There are also several countries in Eastern Europe that are considering the possibility of connecting to the SGC with the help of interconnectors and receiving energy from Azerbaijan.
European Commissioner for Energy Kadri Simson, who will also attend the meeting of the Advisory Council, spoke in an interview with Report about the planned meetings, as well as the importance and ways to expand the SGC:
-On which topics will you be focused on at the next Southern Gas Corridor Advisory Council during your visit?
Yes, I will participate at the 9th Southern Gas Corridor Advisory Council on February 3. The meeting of the Southern Gas Corridor Advisory Council will be a great opportunity to both look back at how this project has helped the EU during this unprecedented energy crisis, and to reflect together on the next steps of our enhanced energy cooperation.
A central topic in our discussions will be the expansion of the Southern Gas Corridor. As you know, this is a project supported via our REPowerEU plan, our new Memorandum of Understanding on a Strategic Partnership in the Field of Energy with Azerbaijan. We aim to increase its capacity to 20 billion cubic meters annually as of 2027. On top of our political support, we are now also exploring with the EBRD the possibility of providing financial support to facilitate its expansion.
I also expect that this year’s meetings will focus more on green energy and the clean energy transition. This is an important area of mutual interest, as set out in our recent MoU. The EU is ready to further support Azerbaijan in its green transition, including through the Economic Investment Plan.
-Are you planning to have any meetings with officials of Azerbaijan during your stay here?
Yes. Together with H.E. President Ilham Aliyev, I have the honor to open the Advisory Council. In addition, I will meet with Minister of Energy of Azerbaijan Mr. Shahbazov, Azerbaijani Minister of Ecology and Natural Resources Mr. Babayev and I will also have a bilateral with Economy Minister Mr. Jabbarov. Other official meetings are also in the works.
-How do you see the importance of SGC since the war in Ukraine started? Was it any help in fighting the energy crisis?
At the height of the energy crisis last year, the Southern Gas Corridor has proved to be a crucial source of piped gas supply for us. Gas volumes delivered to the EU via the SGC in 2022 increased from around 8 billion cubic meters to 11.4, therefore by more than 40% compared with 2021. Azerbaijan has proved to be a reliable energy partner for the European Union over the past years.
- What do you think should be the next step in expanding the SGC and its capacity?
The expansion of the SGC has strong political support from the EU and its Member States. As the Commission, we are trying to facilitate this process.
First, we are in regular contact with all concerned stakeholders: Governments of transit and destination countries, international financial institutions, companies. As public authorities we are striving to create a conducive investment environment. The 9th meeting of the Advisory Council will be a good opportunity to advance our work.
But of course, commercial conditions need to be met for the project to go ahead. The EU has solid and clear rules on the functioning of the gas market – a liberalized market, where companies make decisions based on economic assessments. Investment processes such as the SGC expansion are subject to specific rules in the EU, notably the need to have a successful market test for the Trans Adriatic Pipeline section of the SGC.
In parallel, the Commission is also working in close cooperation with the Member States to make the joint purchasing of gas a reality. Demand aggregation will be the first step in this process and we trust this will help ensure optimal demand conditions to our reliable supplying countries.
- In Summer 2022, EU and Azerbaijan signed an energy memorandum. Are there any plans to sign new and similar memorandums?
The EU and Azerbaijan have a long-lasting and consolidated energy partnership. The Memorandum we signed last year follows the one we had agreed back in 2006 and allows for enhanced cooperation. This means we are now in an implementation phase.
On top of the envisaged expansion of the Southern Gas Corridor by the doubling of its capacity as of 2027, the latest MoU also strengthens our work in the field of methane emissions.
Making the natural gas supply chain as efficient, environmentally and climate friendly as possible is a joint responsibility. Crucially, the 2022 MoU also sets the pathway for cooperation on renewable energy. This is a key area of mutual interest for the EU and Azerbaijan, which embeds the long-term nature of our energy partnership. Here, we are very much determined to see progress over the next months and years, and we will continue supporting Azerbaijan in its efforts to pursue the clean-energy transition.
https://report.az/en/energy/european-commissioner-at-height-of-energy-crisis-sgc-proved-to-be-crucial-source-of-gas-supply/