Azerbaijan's ambition to supply gas to Europe faces obstacles

The Russia-Ukraine conflict broke out, and Europe was in urgent need of natural gas. At that, the government of Azerbaijan announced that by the end of 2027, the country's annual natural gas exports to Europe would double to 20 cubic meters. However, two years have passed, and although Azerbaijan's natural gas exports have continued to grow, they are still far from achieving the target set back. The author believes that the problem with Azerbaijan's natural gas exports to Europe lies in the country's failure to prioritize the construction of liquefied natural gas (NG) export infrastructure, which is highly mobile. 

The latest data shows that in first seven months of this year, Azerbaijan's total natural gas exports reached 14.7 billion cubic meters, an increase of 5.7% compared the same period last year. Of this, 7.8 billion cubic meters were exported to Europe, accounting for more than half of the country's total natural exports. Azerbaijan has announced that its total natural gas exports to Europe this year are expected to approach 13 billion cubic meters. It is clear that Azerbaijan is to meet the target it set two years ago. The reasons for the shortage of natural gas exports from Azerbaijan to Europe are multifaceted. On the surface, is due to insufficient investment in the country's own natural gas fields. However, the reason for the lack of investment is the difficulty in transporting the gas abroad., the capacity of the pipeline transporting natural gas from Azerbaijan to Europe is not enough to support an annual delivery of 20 billion cubic meters.

 This pipeline runs Azerbaijan into Georgia, then into Turkey, and finally into Europe. Currently, Azerbaijan's European natural gas buyers are Slovenia, Bulgaria, Greece, Hungary, Romania, Serbia. These countries together have a population and economic size that is smaller than Germany's, and their oil and gas companies are unable to expand the pipeline's capacity Additionally, as a landlocked country, Azerbaijan cannot load natural gas onto ships for sea transport and can only transport it to Georgia or Turkey first. The problem for is not pipeline gas or LNG, but that in relying on external pipeline gas, the country did not fully consult with Turkey and Georgia, underestimating the mobility the natural gas market. As a result, all parties involved are unable to determine the feasibility of expanding the pipeline in a constantly changing market, and they are not to invest in the pipeline's expansion, leading to the failure of Azerbaijan's plans. The author believes that as a key transitional product for energy transformation, the demand natural gas may still experience significant fluctuations in certain areas. Both the exporting and importing regions should closely monitor the market situation and prepare practical and feasible emergency plans that meet interests of all parties, to prevent local natural gas shortages.