Azerbaijan increases exports of blue fuel to Europe

By Ksenia Loginova

Baku has increased gas supplies to Hungary. By the end of the year, it is planned to pump 100 million cubic meters of blue fuel into the European country. In addition, Budapest wants to purchase 50 million cubic meters of gas for gas storage facilities. Against the backdrop of a decline in energy supplies from Russia to Europe, Azerbaijan decided to reconsider its plans for strategic partnership with EU states. Izvestia was looking into whether it would become a direct competitor to Moscow in the market.

More, more gas
“At the meeting [in Budapest], my colleague Peter Szijjártó said that Azerbaijani gas has already begun to flow to Hungary. Our plans include increasing the volume of supplies,” said Azerbaijani Foreign Minister Jeyhun Bayramov following his visit to the Hungarian capital.

Thus, five EU countries are already receiving Azerbaijani gas. Among them are Bulgaria, Hungary, Greece, Italy and Romania. Some other EU states have also expressed interest in purchasing gas from Baku.

In April, energy companies from Azerbaijan, Bulgaria, Hungary, Slovakia and Romania signed a Ring of Solidarity agreement to use internal European gas interconnectors to increase the flow of Caspian gas through the Southern Gas Corridor.

During Bayramov's visit to the Hungarian capital, the European Commissioner for Neighborhood and Enlargement, Oliver Varhelyi, was in Budapest. Following the negotiations, an official from Brussels announced the EU’s desire to develop cooperation with Baku through strategic energy and transport projects.

According to the head of the Azerbaijani Foreign Ministry, in four years the EU expects to receive 20 billion cubic meters of gas from Baku. “The current dynamics allow us to reach this level,” said the Foreign Minister. In 2021, Azerbaijan supplied the European Union with 8 billion cubic meters, the next year - 3.4 billion cubic meters more, and in 2023 this figure will increase by another 1.1 billion cubic meters.

In turn, his Hungarian colleague emphasized that Brussels had previously criticized Budapest for the fact that the Hungarian authorities had chosen to reorient themselves to the east. “Today, almost the entire leadership of the European Union regularly visits Baku,” he said.

Against the backdrop of a decline in oil and gas supplies from Russia to Europe, Azerbaijan decided to reconsider its energy partnership plans with EU countries. According to Eurostat data, the share of oil that the European Union buys from the Russian Federation has decreased from 29 to 2%, and gas from 38 to 13%. At the same time, the shares of gas supplies from Algeria, Britain and Norway have increased on the European market.

It also increased the volume of Caspian gas to EU states through the Southern Gas Corridor and Azerbaijan.

Strategic partnership
Of all the EU countries, Baku interacts most closely with Budapest. Azerbaijan and Hungary call their relations a strategic partnership. In 2014 and 2023, the countries signed declarations of cooperation.

At the end of August, Budapest entered into an agreement with Baku to store 50 million cubic meters of Azerbaijani gas in its reservoirs. At the same time, as noted by the Hungarian Minister of Foreign Affairs and External Economic Relations Peter Szijjártó, delivery to storage facilities has already begun.

“We have been building cooperation with Azerbaijan for a long time, more than ten years. Now an agreement has emerged, according to which in the fourth quarter of this year we will purchase 100 million cubic meters of gas from Azerbaijan,” he explained.

In the long term, they plan to increase the volume of supplies first to 1 billion cubic meters, and then to 2 billion cubic meters per year.

Diversification, not abandonment
Budapest, in addition to increasing gas imports from Azerbaijan, is interested in increasing LNG supplies to Hungary through a terminal in the Croatian city of Krka and developing a gas field in Romania. In addition, the Hungarian authorities are considering the possibility of importing oil from Ecuador if the overland transit of Russian oil through Ukraine is impossible.

At the same time, negotiations are underway with the Qatari authorities on the supply of liquefied natural gas to Hungary in three years, as well as with representatives of Oman on the possible start of imports of oil and natural gas.

However, as explained in Budapest, agreements with the Gulf countries do not at all mean a refusal of supplies from Russia, but are aimed at their diversification.

Reorientation towards Baku
As Doctor of Economic Sciences, Azerbaijani expert Ilgar Velizade explained in an interview with Izvestia, Baku became an active player in the European gas market after the completion of the construction of the Southern Gas Corridor, which provides for the supply of Azerbaijani gas to consumers in Italy, as well as the countries of the Balkan Peninsula.

— These deliveries are carried out starting in 2021. They have increased in recent years. The Balkan states, the countries of South-Eastern Europe are interested in this: Bulgaria, Romania, Hungary, Albania, North Macedonia, Greece, as well as a number of other states that are now actively building their transport infrastructure designed to receive Azerbaijani gas, the expert explained.

He noted that not long ago the Bulgaria-Greece interconnector was built, which makes it possible to transport Azerbaijani gas to Bulgaria. Thanks to this, Sofia receives 1 million cubic meters of Azerbaijani gas.

— Currently, the construction of a gas pipeline infrastructure is underway, which makes it possible to connect this gas interconnector Bulgaria - Greece with Romania and Hungary. Through these main gas pipelines, Azerbaijani gas will be delivered to these countries. There is the Ring of Solidarity project, in which a number of Balkan states participate, including Serbia, Bosnia and Herzegovina. Slovakia also appears among the participants. According to this project, Azerbaijani gas will also flow to these states,” the specialist concluded.

Not a competitor to Russia
The Azerbaijani, political scientist Nair Aliyev noted that Baku cooperates very closely with at least 15 EU countries in terms of energy supplies. First of all, these are the countries of South-Eastern Europe: Hungary, Serbia, Italy, Albania.

— There are very close relations between the parties, constant visits. Hungary generally occupies a special place, since it is included as an observer in the Organization of Turkic States. This is not a Turkic country, but at the same time, some tribes in Hungary feel involved in the Turkic world; there are many Turkic words in the Hungarian language,” the publication’s interlocutor said.

He emphasized that cooperation in the energy sector against the backdrop of diversification of supplies is very important for Budapest.

— Russian gas is being replaced. But the replacement is still quite conditional, since it will not be possible to do it completely. Azerbaijan represents an additional source of gas supplies. Baku plays its role in the European gas market, quite noticeable, but this does not mean that Azerbaijan has become a direct competitor to Russia, no, the political scientist emphasized.

The analyst added that countries want to diversify suppliers.

“This is beneficial to both the EU countries and Azerbaijan, since it is accompanied by a kind of political support from European countries with which Baku cooperates. And this is important in the current unstable world,” the analyst concluded in an interview with Izvestia.
This article originally appeared in Russian at iz.ru and was translated and edited by Rhod Mackenzie