Four European Union nations signed a deal with Azerbaijan Monday for broader gas distribution to the bloc, with the Eurasian partner targeting to raise gas supply to Europe to 423.78 billion cubic feet (12 billion cubic meters) this year.
The memorandum of understanding (MOU) for the so-called Solidarity Ring initiative paves the way for gas transfers from the State Oil Company of the Azerbaijan Republic (SOCAR) via existing infrastructure, separate press releases from parties to the agreement said. Supplies would be delivered by pipeline networks of Bulgaria's state-owned Bulgartransgaz EAD, Hungary's FGSZ Ltd., Romania's state-owned Transgaz SA and Slovakia's Eustream, also government-controlled.
The agreement inked during a meeting between Azerbaijan President Ilham Aliyev and his Bulgarian counterpart Rumen Radev follows a 2022 pact between the 27-member bloc and Baku for increased oil and gas shipments to the EU. The Memorandum of Understanding on a Strategic Partnership in the Field of Energy passed July 18, 2022 includes a commitment to double the capacity of the Southern Gas Corridor to at least 706.29 billion cubic feet (20 billion cubic meters) in yearly transfers to the EU by 2027, according to a European Commission announcement of the deal.
"The MoU signed today, when implemented, will definitely strengthen energy security in Europe, and allow Azerbaijan to export more gas to many more European countries", Aliyev told the signing ceremony in Bulgaria, according to a transcript on the Azerbaijan presidential website.
"In 2021, we delivered 8 billion cubic meters to Europe. And this year, our target is 12", he added. "So, that will be almost half of our total export, which we plan for this year at the level of 24.5 billion cubic meters".
Azerbaijan plans to deliver its first gas exports to Hungary and Slovakia this year "if all necessary interconnectors are in place", the president said, noting in Europe his country already supplies Bulgaria, Georgia, Greece, Italy and Türkiye.
Azerbaijan's gas export to Romania has also started this year, he said. SOCAR and state-owned Romgaz SA finalized February an agreement proposed last year for the transport of up to 35.31 billion cubic feet (one billion cubic meters) of natural gas to Romania.
Aliyev also said: "We are in the process of negotiations with Albania to build a local gas distribution system, because the Southern Gas Corridor crosses Albania’s territory".
Tuesday's deal comes as the EU looks to wean itself off reliance on Russian energy in response to its invasion of Ukraine. Russia was the EU's top source of natural gas and petroleum from 2010 to 2020. It comprised 38.2 percent of the bloc's imports of natural and liquefied natural gas and 25.7 percent of the EU's imports of crude oil in 2020, according to the latest energy imports percentage statistics by EU agency Eurostat published April 13.
The EU's natural gas production has also continued dropping, by 7.6 % to 1,755,874 terajoules in 2021 against 2020, according to the latest Eurostat update. Meanwhile inland demand rose 4.3 percent the same period to reach 15,834,900 terajoules, the EU statistics agency reported April 13.
"Especially at a time when our partners need a reliable gas supply, solidarity and cooperation are fundamental", Radev told the ceremony, according to a President.az transcript. "The war in Ukraine has made us look for new dimensions of the concepts of good neighborliness, solidarity and cooperation. This basically requires us to look for new solutions, new routes and supplies to be able to make changes to the international logistics map".
Romania Energy Minister Virgil-Daniel Popescu called for the agreement to expand to include Moldova, Türkiye and Ukraine, according to Azerbaijan's Trend News Agency. "It is necessary to start work immediately after signing the memorandum. The door should be open for Türkiye, Moldova, and Ukraine", he was quoted as saying.
Tuesday's deal, which "sets out directions of cooperation" between SOCAR and the four gas distributors, was signed by Azerbaijan's energy minister and cabinet representatives of the four EU states, the Azerbaijan presidential office said announcing the signing.
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