Azerbaijan signs new gas deals with Europe

BAKU - Reuters

Azerbaijan’s President Ilham Aliyev (L) speaks with his Russian counterpart Vladimir Putin. Reuters photo

Azerbaijan has signed contracts to supply European buyers with gas, offering an alternative supply source to Russia towards the end of the decade.

Moscow has increased its diplomatic efforts to bring oil and gas rich Azerbaijan closer to its orbit as Russian President Vladimir Putin has been keen to restore influence over former Soviet republics.

However, his trip to Azerbaijan last month yielded few results, dashing Moscow’s hopes of challenging the dominance of Western energy majors there.

Earlier this year, Azeri state oil company SOCAR and partners including BP and Statoil selected the Trans Adriatic Pipeline (TAP) for potential gas deliveries to Europe, following more than a decade of planning, dealing a blow for Russia’s aspiration for tighter control over gas routes.

SOCAR said on Sept. 19 that buyers of Azeri gas from its Shah Deniz II project are Shell, Bulgargas, Gas Natural Fenosa, Greek DEPA, Germany’s E.ON, French GDF Suez , Italian regional utility Hera Trading, Swiss AXPO and Italian Enel.

Gazprom covers a quarter of Europe’s gas needs with over 150 bcm of its exports a year.

Shah Deniz is expected from around 2019 to feed 16 bcm of gas per year to Europe, with 10 bcm earmarked for Europe and 6 bcm for Turkey.

Half of the gas is destined for Italy, a SOCAR official said, revealing lion share will go to Italy.