Europe seeks alternative gas supply routes to reduce its reliance on Russia

Natural gas pumping station (AP photo).
By Karolina Klaskova
4 Min Read

At a time of growing tensions around Ukraine, the European Union is struggling to secure alternative sources in the case of a gas outage from Russia. Azerbaijan, among other countries, offers help and could partially supply gas and oil.

“If there is an urgent need as we saw in Turkey, some volumes, of course, would be made available,” Elin Suleimanov, Azerbaijan’s ambassador to the U.K. told Bloomberg on Friday.

The diplomat referred in his statement to a ten-day-old shortage of Iranian supplies to Turkey, which was caused by a technical defect.

According to Suleimanov, Azerbaijan is able to increase production and send gas to Europe via the Southern Gas Corridor (SGC) which runs through Georgia, Turkey, Greece, and Albania to Italy. The last part of the project, the Trans Adriatic Pipeline, was put into operation at the beginning of last year. Azerbaijan thus entered the lucrative gas market which is currently dominated by Russia.

The gas flowing through the new corridor comes mainly from the giant Shah Deniz 2 field in the Caspian Sea. In addition, Azerbaijan may redirect part of its production from Turkmenistan to Europe.

However, this will not be enough to completely cover possible outages by Russia. Azerbaijan’s export plan for this year relied on the export of 19 billion cubic meters of gas. Russia sent 168 billion cubic meters to Europe and Turkey in 2020.

“But Azerbaijani volumes are not equal to the Russian volumes, that’s obvious,” Suleimanov added.

Azerbaijan would demand long-term contracts for emergency aid. Southern Gas Corridor-type projects are extremely costly, and Azerbaijanis are also well aware that the EU wants to rely only on renewable energy sources in the future.

The EU Commissioner for Energy Kadri Simson will fly to Baku on Thursday to discuss the current situation. Three days later, the politician will also attend the EU-U.S. Energy Council. President Joe Biden has promised that the United States will help secure gas supplies to Europe in the case of a Russian invasion of Ukraine. This would in all likelihood mean an interruption of the Nord Stream 2 gas pipeline supply.

German Foreign Minister Annalena Baerbock said on Thursday that Nord Stream 2 is part of a sanctions package being prepared by the EU in coordination with the U.S. and the United Kingdom. The U.S. is currently at maximum capacity with natural gas supplies to the EU and the government is therefore negotiating possible LNG supplies with Qatar, which today provides Europe with around 5 percent of gas.

Analysts expect the EU to be able to deal with a short-term disruption of all Russian gas supplies. However, this would have serious economic consequences and would require emergency steps to reduce demand, such as the temporary closure of factories.

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