Azerbaijan calls on EU to reconsider finance restrictions for gas corridor expansion
Ilham Aliyev, the President of Azerbaijan said that the European Union needs to reassess their financing and policies regarding long-term contracts in order to continue importing natural gases from Azerbaijan. Baku could also look for other export markets.
He cited the European Investment Bank’s ban on new financing for fossil fuels and the lack of long-term contracts to purchase gas as obstacles to increasing exports to EU.
Aliyev said at a policy conference that the EU market was superior in terms of rules, legislation and pricing. But we shouldn't look exclusively to the west. "We can also look eastward, southward." "This is crucial for the future of Azerbaijani gas industry and Europe’s energy security."
The EU increased its gas imports to the South Caucasus from 8 billion cubic meters in 2021, as it sought to diversify its energy sources following the outbreak of war in Ukraine.
Brussels and Baku signed an agreement in 2022 to double the gas imports by 2027 to at least 16.6 bcm per year. Azerbaijan will increase its gas exports to Europe next year to 14 billion cubic meters, said the country's Energy Minister this month.
Aliyev suggested that these goals may be difficult to achieve, due to the difficulties in securing financing for infrastructure from Brussels.
Aliyev stated that "all our major energy projects, whether oil or gas, were funded using a model of 70% corporate financing and 30% borrowed funds." "Now European Institutions must return to this approach."
Azerbaijan wants to expand the Southern Gas Corridor, which is a 3,500 km (2.17 miles) long network that runs from Azerbaijan all the way to Italy.
Aliyev stated that 12 countries receive Azerbaijani Gas, including 10 in Europe. Albania has agreed to gasification projects and Bulgaria is planning one.
In the context of potential trade negotiations, the United States also wants to sell liquefied gas to Europe. (Reporting and writing by Nailia bagirova in Baku, Lucy Papachristou from London; editing by Alexander Marrow & Barbara Lewis).
(source: Reuters)
