EU Looking for Gas Deal with Azerbaijan to Offset Loss of Russian Supplies

The European Commission proposed the EU members a deal with Azerbaijan to boost imports of natural gas and support expansion of Southern Gas Corridor, the pipeline to increase supply. The Commission’s draft memorandum of understanding (MoU) is part of the bloc’s goal to reduce reliance on Russian fossil fuels following Moscow’s invasion of Ukraine. The proposal, which needs approval from the EU governments, could still change.

The document prepared by Brussels says the EU and Azerbaijan aim to support bilateral trade of natural gas via the Southern Gas Corridor, of at least 20 billion cubic meters (bcm) annually by 2027.

Azerbaijan delivered around 8 bcm of gas into European countries through the Trans-Adriatic pipeline, the final leg of the Southern Gas Corridor pipeline network.

The proposal says both sides would finance the expansion of the network to carry more Azeri gas to Europe. The investment would also include the network to carry low carbon gases in the future.

An increase in deliveries would also require Azerbaijan to boost its domestic gas production.

The draft emphasizes the importance of “long-term, predictable and stable contracts” to provide security to gas producers. It also underlines that future gas contracts must comply with the EU’s climate change targets. Brussels will require gas use to drop, especially after 2030.

Both sides should increase action to curb emissions of methane, a potent greenhouse gas, in their supply chains, including through incentives to collect gas that would otherwise leach into the atmosphere.

As a scheduled maintenance began on the Nord Stream 1 pipeline this week, concerns over additional cuts to Russian gas supply grew. Governments and companies warn that Russia may prolong the suspension.

The draft agreement said the EU and Azerbaijan would also examine the development of electricity interconnections, to promote renewable energy, and discuss future hydrogen trade.

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now

Do you need to access special insights on this matter?

Start your 7-day free trial  and become a member today

Subscribe to Top Insights Today

Subscribe to Executive Newsletter Top Insights Today

The Executive Newsletter -Top Insights Today- puts global business events in perspective through special insights

Join the ranks of global executives and subscribe to Top Insights Today

Top Insights Today covers insights on energy, clean-tech, oil&gas, mining, rare earths, defense, aviation, infrastructure, manufacturing, electrical vehicles, big-tech, finance and politics of business

By clicking subscribe you agree to our privacy and cookie policy and terms and conditions of use.

Read more insights

China Fears Financial War Could Result the Country Being Removed From Global Dollar System

Escalation in tensions with the US makes China suspicious of a worsening financial war that could result in it being shut out of the global dollar system, a possibility once regarded as unthinkable. 

EU Looking for Ways to Boost Lithium Supply

As Europe tries to switch to cleaner energy sources, battery storage is expected to play a key role in the effort to ramp up renewable energy operations. And lithium is a crucial raw material in batteries. While both the EU and the members states scramble to increase lithium supplies, not much of the white metal can be found in Europe’s soil. That forces the bloc to turn to lithium-rich countries. Lithium can be used in batteries for a variety of electronics. It is also the driving source for electric vehicles (EVs) and renewable energy battery storage. The EU’s ambition to wean off combustion engine cars by 2035 makes supply security of battery metals, including lithium, even more urgent. 

Sinopec Cuts Russian Crude Purchases

China’s Sinopec, Asia’s biggest oil refiner, has cut its Russian crude imports in July as it was unwilling to pay higher prices other buyers have been offering. The company has been the largest buyer of Russian ESPO type crude oil in the past two months, acquiring around 20 million barrels. However, in July the company is expected to buy a smaller amount after offering lower bids to Russian exporters. 

Stay informed

error: This content is protected !!