IEA chief warns Europe its gas efforts won’t be enough even as Brussels inks deal with Azerbaijan

IEA chief warns Europe its gas efforts won’t be enough even as Brussels inks deal with Azerbaijan
An expansion of TAP pipeline deliveries of Azerbaijani gas to Europe has been agreed, but it won't happen overnight. / Genti77, wiki commons.
By bne IntelIiNews July 19, 2022

Even as Europe was on July 18 signing a deal with Azerbaijan for more gas, International Energy Agency executive director Fatih Birol was sounding the alarm that the European Union’s attempts to diversify gas suppliers remain inadequate when it comes to getting through the coming winter without Russian gas. Immediate moves to cut demand were vital, he said.

“It is categorically not enough to just rely on gas from non-Russian sources – these supplies are simply not available in the volumes required to substitute for missing deliveries from Russia,” Birol wrote in an article published by the IEA, as fears grew Russia, pushing back against European opposition to its war in Ukraine, could end gas deliveries to Europe in the run-up to the winter season.

“This will be the case even if gas supplies from Norway and Azerbaijan flow at maximum capacity, if deliveries from North Africa stay close to last year’s levels, if domestic gas production in Europe continues to follow recent trends, and if inflows of LNG [liquefied natural gas] increase at a similar record rate as they did in the first half of this year,” added Birol.

The European Commission’s gas agreement with Azerbaijan so far amounts to no more than a memorandum of understanding with Baku that, should all be parameters be in place, it will more than double exports of Azerbaijani natural gas to an annual volume of at least 20bn cubic metres (bcm) a year by 2027.

On a visit to Baku for the move in line with European Union policy to attempt to end the bloc’s heavy dependence on Russian gas, Commission President Ursula von der Leyen said: “Today, with this new memorandum of understanding, we are opening a new chapter in our energy cooperation with Azerbaijan, a key partner in our efforts to move away from Russian fossil fuels.”

“Azerbaijan is a crucial energy partner for us that has always been reliable,” added von der Leyen at a joint news conference with Azerbaijan’s President Ilham Aliyev.

Azerbaijan has for around one and a half years delivered Caspian Sea gas to Europe via the Trans Adriatic Pipeline (TAP), the last leg of the 3,500-kilometre Southern Gas Corridor (SCG), which runs from Turkey to Greece, Albania and Italy. According to von der Leyen it presently makes deliveries at a rate of more than 8bcm per year. The objective is to expand the capacity flow to 20bcm by 2027, she said. The gas imports on the route are already scheduled to increase to 12bcm next year.

Aliyev remarked: “Long-lasting, predictable and very reliable cooperation between EU and Azerbaijan in the field of energy is a big asset.”

Europe is wary of Russia turning its natural gas supplies into a weapon of blackmail given European opposition to the Russian invasion of Ukraine that began on February 24.

In May, EU leaders agreed to halt most Russian oil imports by the end of the year as part of the sanctions wave they have hit Moscow with in response to its the military action in Ukraine.

The proposal of introducing a complete ban on Russian gas has, however, not progressed at this stage. In 2021, Russia met almost two-fifths of the EU’s gas needs, delivering around 155bcm of gas.