European leaders continue to hold some negotiations with natural gas exporting countries to reduce dependence on Russia’s energy resources. For this purpose, Ursula von der Leyen, President of the European Commission, visited Baku on 18 July 2022.
European Union (EU) leaders see Azerbaijan as one of the alternative suppliers along with Algeria, Egypt and Qatar. For this reason, it is ready to develop relations with the country in question. The situation has also been confirmed by the visit of the President of the European Commission.
During the meeting between President of Azerbaijan Ilham Aliyev and von der Leyen, an agreement was signed, which stipulates that Baku will increase the gas supply to Europe to 20 billion cubic meters per year within five years, that is, until 2027. In 2021, Azerbaijan exported 8 billion cubic meters. This year, this figure can be increased by 50% to 12 billion cubic meters.[1]
The Memorandum also declares the EU’s commitment to climate targets. In addition, the parties agreed to make Azerbaijan’s natural gas supply efficient and to make this country “environmentally friendly”. The document also envisages the expansion of the Southern Gas Corridor for the supply of Azerbaijani gas to the EU and the Western Balkans. Von der Leyen made the following statement on the subject:[2]
“Today, through the new agreement, we are turning a new page in our energy cooperation with Azerbaijan, a key partner in our efforts to move away from Russian fossil fuels. We also intend to strengthen our existing partnership, which guarantees a stable and reliable gas supply to the EU through the Southern Gas Corridor. As we pursue the goals of the Paris Agreement, we are laying the foundations for a long-term partnership on energy efficiency and clean energy. However, energy is just one of the areas where we can expand our cooperation with Azerbaijan and I look forward to using the full potential of our relationship.”
It was previously stated that the construction of the Greece-Bulgaria Pipeline connection (IGB) has been completed and the trial period has begun. The inter-energy line connects the Greek gas network through the IGB national gas network “Bulgariantransgaz”. The 140 km long natural gas pipeline on Bulgarian territory is designed to carry 3 billion cubic meters of natural gas per year, and is planned to be expanded to 5.5 billion cubic meters in the future. It is stated that the cost of this pipeline project is 145 million Euros.
The said line allows the import of Azerbaijani natural gas to Bulgaria and also from there to other parts of Europe. The IGB will run from the Trans-Adriatic Pipeline (TAP) to the Greek national gas system and then through the regasification plant to Alexandroupolis Port. However, it is envisaged that natural gas will be transported from Greece to Bulgaria and also from there to Serbia, North Macedonia, Romania, Hungary and Ukraine in the future.[3]
Concerns about further cuts to Russia’s gas supply have increased after the start of pre-planned repairs on the Nord Stream-1 Natural Gas Pipeline, which supplies natural gas to Germany. Because Russia and Europe are on the brink of an energy war. The Moscow administration suspended the natural gas supply through the Nord Stream-1 Natural Gas Pipeline, which is the largest, if not the only, pipeline that provides natural gas supply to the EU, on the grounds that maintenance will be carried out from 11 July 2022 until 21 July 2022. European officials, on the other hand, stated that they are not sure that Russia will continue to export after this date.[4] Although the flow of natural gas has resumed, there is no guarantee that the Kremlin will not cause new cuts by applying for an energy card.
As it can be understood, although the threat on energy is not directly mentioned, the tension is increasing. Economists warn that Russia has all the means to cut off supply. Time will tell how Europe will cope with resource scarcity. However, von der Leyen’s visit to Azerbaijan and the subsequent agreement between the parties is an extremely important victory for Brussels’ efforts to diversify its gas suppliers.
Mr. Aliyev had stated long before von der Leyen’s visit that Azerbaijan would take a positive step towards European expectations. As a matter of fact, the negotiations on increasing the gas supply from Azerbaijan to the EU had started long before the Russian-Ukrainian War broke out. This step taken by Mr. Aliyev is an indication that Baku will not make any concessions in the aforementioned area. On the other hand, it is regarded as certain that Azerbaijan will gain the friendship of the EU.
It can be said that the EU has achieved a significant success in its energy struggle with Russia thanks to the agreement with Azerbaijan. However, Azerbaijani resources will be insufficient in eliminating dependence on Russia. According to the International Energy Agency, the EU imported 155 billion cubic meters of natural gas from Russia in 2021. This figure is almost 20 times more than the energy to be supplied from Azerbaijan and accounts for 45% of Europe’s import volume. It also accounts for 40% of total consumption in the EU.
As can be understood from the above information, Azerbaijan is not the only supplier candidate. For this reason, the EU is also holding some negotiations with other energy exporting countries. However, with the aforementioned agreement, it has been clearly seen that Azerbaijan’s energy resources are needed. In this sense, Azerbaijan’s increasing its share in the European market and becoming one of the prominent suppliers is an important diplomatic achievement for Baku.
Although Azerbaijan will not be able to replace Russia, the decrease in the share of Russian natural gas in the European market is an extremely negative result for the Moscow administration. As a matter of fact, in the period from the beginning of 2022 to July, Russia’s natural gas production decreased by 10% and also its exports to Europe decreased by 33%.[5]Therefore, Russia is suffering greatly economically due to the sanctions imposed. Therefore, by making a counter move, it puts pressure on Europe over the natural gas it holds. However, the Kremlin’s policy of repression is hurting itself as much as it does Europe. But despite everything, Russia sees energy as a political tool.
The decrease in Russia’s natural gas share in the European market also means a decrease in its revenues from energy sources. To compensate for this loss, Moscow is holding talks with China, which is in the position of the second largest consumer. After the agreement signed between the EU and Azerbaijan, allegations have been raised that negotiations have been held between Russia and China. In this sense, Moscow is considering selling the natural gas going to Europe to China via Mongolia. In this context, the natural gas pipeline, which is planned to start its construction in 2024, is aimed to be completed in two years.[6]
As can be seen, the importance of the Caucasus for the EU is increasing day by day. Azerbaijan’s deepening of its relations with the Union has been an important gesture for Europe. Undoubtedly, the support of Baku to the EU, which wants to eliminate the problems it has experienced in the energy sector due to the Russia-Ukraine War, increases the importance of Azerbaijan in the eyes of European countries.
Time will tell how Russia-Azerbaijan relations will develop. However, it can be foreseen that the rapprochement on the Baku-Brussels line will not be positively received by Moscow. Although Azerbaijan did not show a serious reaction to Russia’s attitude before the Ukrainian intervention and even preferred to remain neutral, it is uncomfortable with the policy based on the lack of resolution pursued by Moscow in Karabakh. Because Azerbaijan is planning to crown the Karabakh issue with an agreement that will ensure lasting peace as soon as possible. For this, it needs external support. Therefore, EU support to Azerbaijan is very important for Baku. As a result, it is inevitable that the positive atmosphere created by the aforementioned agreement will also affect the EU’s approach to the peace negotiations on the solution of the Karabakh Conflict.
[1] “Поставки газа в страны Евросоюза из Азербайджана вырастут вдвое”, Golos Ameriki, https://www.golosameriki.com/a/eu-azerbaijan-gas-ursula-von-der-leyen/6663516.html, (Date of Accession: 19.07.2022).
[2] “EU agrees deal with Azerbaijan to double gas exports by 2027”, Euronews, https://www.euronews.com/my-europe/2022/07/18/von-der-leyen-heads-to-azerbaijan-to-secure-new-gas-import-deal, (Date of Accession: 19.07.2022).
[3] “Началась закачка первого азербайджанского газа в интерконнектор Греция-Болгария”, Azer Tac, https://azertag.az/ru/xeber/Nachalas_zakachka_pervogo_azerbaidzhanskogo_gaza_v_interkonnektor_Greciya_Bolgariya-2184575, (Date of Accession: 19.07.2022).
[4] “Песков прокомментировал ситуацию вокруг “Северного потока”, Ria Novosti, https://ria.ru/20220623/energetika-1797546829.html, (Date of Accession: 19.07.2022).
[5] “Газпром по итогам 6,5 месяцев 2022 г. снизил добычу газа на 10,4%, поставки в дальнее зарубежье – на 33,1%”, Neftegaz.Ru, https://neftegaz.ru/news/companies/743829-gazprom-po-itogam-6-5-mesyatsev-2022-g-snizil-dobychu-gaza-na-10-4-postavki-v-dalnee-zarubezhe-na-33/, (Date of Accession: 19.07.2022).
[6] “Монголия заявила, что газопровод Россия-Китай будет запущен в 2024 году”, Central Asia, https://centralasia.media/news:1793605, (Date of Accession: 19.07.2022).
