Azerbaijan Struggling to Secure Long-Term Gas Sales to Europe

Azerbaijan may not be able to double natural gas exports to Europe by 2027 amid failure to secure long-term sales according to Bloomberg sources.

• The country needs to secure long term deals before investing billions of dollars to boost production. Azerbaijan signed an agreement with the European Commission last year to double the supplies to 20bcm annually by 2027.
• Discussions on the terms of supplies with more than 10 European countries have so far been inconclusive. As the European energy crisis has eased, buyers are more hesitant to commit to long term deals. Europe has increased LNG import capacity and new global supply from US and Qatar is expected online in a few years.
• “The timing of the new pipeline expansion from Azerbaijan is a challenge for the project given that the market is expected to see a buildup of an oversupply in global LNG markets from 2027 and onwards,” said Sindre Knutsson at Rystad Energy
• Azerbaijan wants at least 20 year commitment from Europe to increase investments to boost supplies and infrastructure, according to Ilham Shaban at Oil Studies Center.