Azerbaijan potential key role in EU energy security highlighted
City University's energy expert, Professor Alan Riley, highlighted Azerbaijan's role in EU energy security in a recent lecture at the House of Lords.
Professor Riley outlined current and future Azerbaijani gas production, which will supply an additional 16bn m3 (bcm) per annum when the Shah Deniz 2 field comes on stream in 2017, much of which will be supplied to European customers. He commented: "This will be significant to European energy security, away from over-reliance on Russian Gazprom.
"Azerbaijan also has the potential to become a major gas transit hub, supplying to the EU from resources across the Caspian region, particularly Turkmenistan." He went on to outline the changing dynamics of world gas supply and Russia's realisation that the game has dramatically changed regarding the relationship between Europe and the Caspian and Central Asia region.
"Gas will increasingly become the energy of choice for the EU. The cost of renewable energy generation remains very high, and coal has a significant environmental impact and is no longer favoured by governments. Azerbaijani gas will play an essential role in the future. The Panama Canal is currently being widened in order that liquefied natural gas (LNG) may be transported. The EU needs to find other resources from more diverse suppliers. Although extraction remains expensive, shale gas could be used widely in the future.
"However, it is unlikely that the Nabucco pipeline, in its originally proposed form, will be constructed, despite gaining considerable political support across the EU. A major issue is the astronomic cost of €14–20bn (£11.6–16.6bn), and the other is that Azerbaijan could only fill one-third of its 31bcm capacity. In addition, the proposed Nabucco project was of concern to Gazprom, which derives two-thirds of its revenue from EU customers."
