Month: September 2023

Addressing the nation late this evening, President Salome Zurabishvili said she “was not going anywhere” and would continue to do all she could to promote Georgia’s European Union membership. This comes after the ruling party announced its intention to launch the impeachment procedures, claiming the President violated the Constitution by starting her European tour even though the government rejected her travel plan.

Speaking against the backdrop of the Orbeliani Presidential Palace illuminated with the EU and Georgia flags, she said: “I am addressing you because I am only accountable to you because you elected me, and I feel accountable to you.”

She said: “I know you elected me because you knew me all my life for what I was: pro-European, supporter of Georgia’s European future, and partly European,” adding “I know what future you want, […] what future the next generation, the young generation wants.”

She stressed that all the problems Georgia faces today, be it corruption, emigration, or the “totally uncontrolled” influx of Russians into the country, can only be gradually solved when Georgia is part of the EU. “This is Georgia’s only perspective,” she emphasized.

“That’s why I am not going anywhere,” said Zurabishvili, defying the calls for impeachment. “I am here, and I will go wherever I have to go because I am protecting the Constitution of this country, and I swore to do so when I took the pledge as President. I will remain faithful to that oath,” she said, noting that the Constitution obliges all Georgian institutions to do everything in their power to facilitate Georgia’s EU integration and that she considers this her “ultimate and highest responsibility.”

The President said that she would continue to visit European capitals and was proud that she was doing so with her own financial means. However, she said “it’s not right” for the President to organize such meetings privately. She noted, however, that she was determined to continue her European tour to bring the voice and aspirations of Georgian citizens to the EU capitals.

She also said that she was proud to represent the choice of the Georgian people and that the trust and respect she enjoys in EU capitals was earned by the Georgians who took to the streets in protest [referring to the massive rallies against the Russian-style Foreign Agents Law on March 7-9]: “If you had not come out and shown the whole of Europe how important this perspective is for you, I probably would not have had such trust from other leaders.”

She said, “Everyone knows that Georgians will never bow to Russia, and we must protect this together.” Zurabishvili concluded: “We will continue on this path until we reach where Georgia belongs. And it will be good if the government realizes this and comes to terms with it. And if not, my hope is with you, and you can have your hope in me; we will act together.”

Also Read:

• 04/09/2023 – NGOs: Attempt to Impeach the President is an Attack on Georgia’s EU Membership Aspirations
• 01/09/2023 – EU Partners React to Announcement of Impeachment Proceedings against President
• 01/09/2023 – Georgian Dream Launches Impeachment Proceedings Against President

The post Injuries, flight disruption in Moscow after new Ukraine drone attacks – Arab News first appeared on The South Caucasus News.

Article tags
EnergyPoliticsRegulationEuropeGlobalCountry Analysis

• Azerbaijan’s gas exports to the EU have risen significantly since 2021. However, Azerbaijan’s pledge to double gas flows to the bloc by 2027 will remain constrained by infrastructure capacity and rising domestic consumption.
• Russian imports have allowed Azerbaijan to ramp up supplies to the EU slightly, but such a deal is not sustainable over the longer term.
• Investment will be necessary to upgrade Azerbaijan’s gas infrastructure and increase production, which could prove difficult as the EU favours renewables and higher volumes of liquefied natural gas (LNG).

According to Azerbaijan’s president, Ilham Aliyev, exports of gas from Azerbaijan to Europe will rise to 11.6bn cu metres in 2023 (from 11.4bn in 2022). The ramp-up in gas exports to Europe is the result of a preliminary agreement in July 2022 between Azerbaijan and the EU to double gas flows by 2027, which would mean annual volumes of at least 20bn cu metres, compared with only 8.1bn cu metres in 2021. On Azerbaijan’s side there are several barriers to meeting such a commitment, however. Given the general trend of growth in domestic consumption, it is unlikely that Azerbaijan will be able to fulfil its promises.

Azerbaijan’s gas exports to the EU increased in 2022

Azerbaijan has become a new player in the European gas market after the EU replaced most of its dependence on Russia for its energy supplies. According to Azerbaijan’s Ministry of Energy, the country produced 46.7bn cu metres of natural gas in 2022 (up from 43.8bn cu metres in 2021). Data from the energy ministry show natural gas exports of 22.3bn cu metres in 2022, up from 19bn cu metres in 2021 (a rise of 18%), of which 11.4bn cu metres went to the EU, compared with 8.1bn cu metres in 2021. The rise in gas exports to the EU was mainly achieved owing to infrastructure operating at full capacity and stable supplies. The trend continued in the first quarter of this year, with Azerbaijan supplying a total of 2.9bn cu metres to the EU, the largest share of the country’s gas exports.

Gas exports to the EU are constrained by domestic demand

Rising consumption of natural gas domestically will limit spare capacity to ramp up exports. According to government sources, domestic use of natural gas stood at about 13bn cu metres in 2021. Data for 2022 have yet to be published. However, domestic gas consumption grew at an average annual rate of about 3.5% in 2017‑21, putting a conservative estimate of consumption in 2022 at about 13.5bn cu metres, and consumption in 2026 at about 15bn cu metres.

In 2022 Azerbaijan’s total gas production totalled 46.7bn cu metres, and the government forecasts that production will increase by 3bn cu metres by 2026, to about 50bn cu metres. Azerbaijan has enough gas to meet its domestic demand. However, even assuming a further increase by a similar volume in 2027, it is very unlikely that Azerbaijan will be able to meet its rising export demands to the EU. Gas exports in 2022 totalled 22.3bn cu metres.To deliver extra volumes by 2027, Azerbaijan will rely heavily on the Absheron fields in the Caspian Sea, where gas production is scheduled to start in 2023. Annual output from the Absheron fields will total 1.5bn cu metres, which is expected to increase to about 5bn cu metres by 2027 if further expansion is carried out, which would have to be agreed by 2023 in order to increase gas exports to the EU. Even with such an increase, volumes would fall short of the about 10bn cu metres needed to fulfil the agreement.

Deal with Russia creates additional hurdles

A deal signed with Russia highlights that Azerbaijan is struggling to meet its domestic demand and export commitments. In November 2022 Azerbaijan announced a deal under which Russia’s state gas producer, Gazprom, would supply a total of 1bn cu metres of gas through to March 2023. Furthermore, a swap agreement has been reached with Turkmenistan, through Iran, under which 1.5bn‑2bn cu metres would be supplied to Iran from Turkmenistan and an equivalent volume from Iran to Azerbaijan.

Azerbaijan’s immediate solution to buy gas from Russia is unlikely to be a viable option over the medium to long term. For now, the EU’s need to source alternative supplies of gas has precluded any complaints about the fact that Azerbaijan’s reported deal with Russia—the exact terms of which remain unclear—violates the intent of the EU’s agreement with Azerbaijan, which was to cut the bloc off from Russian gas. As the EU builds an alternative gas supply infrastructure, it will press harder to ensure that this infrastructure is not dependent on subsidiary agreements with Russia.

Azerbaijan’s infrastructure capacity will also limit gas exports to the EU

Azerbaijan’s export infrastructure capacity will also limit the country’s ability to ramp up exports to the EU. Gas from Azerbaijan travels to Europe through the Southern Gas Corridor (SGC), a network of three pipelines covering about 3,200 km from the Shah Deniz gasfield in the Caspian Sea through the South Caucasus, Turkey and the Balkans, ending in the heel of Italy. The leg of the SGC that brings natural gas to the EU—the Trans-Adriatic Pipeline (TAP)—has a current capacity of 10bn cu metres. Although gas capacity can be increased in relatively small quantities without technical improvements, an expansion of the pipeline will be necessary to bump up exports to 20bn cu metres by 2027.

Azerbaijan needs significant investment in its energy sector

Azerbaijan needs significant investment to develop new fields and upgrade its energy infrastructure. According to the International Energy Agency, the country has natural gas reserves of 1.3trn cu metres, most of which are found in the Shah Deniz Caspian Sea field. To date the field has been developed in two phases, a first one producing some 10bn cu metres annually and a second, which started production in 2021, set to produce an additional 16bn cu metres annually by 2026. A third phase, Shah Deniz 3, is only scheduled to begin within four years. Reserves at the Absheron fields have proven lower than expected. Two other gasfields are particularly important, the Shafaq-Asiman and Umid-Babek fields. However, geological exploration of the Shafaq-Asiman gas field has not yielded positive results yet, while the Umid-Babek fields are both geologically complex and need substantial investment to increase gas production to the level required to meet Azerbaijan’s 2027 EU exports goal.

Increasing the pipeline’s capacity will also require significant investment and considerable time. There are ongoing discussions on the expansion of the Southern Gas Corridor. However, expanding TAP depends on the level of gas requested by European buyers and whether they are committed to taking a decision on whether to expand TAP’s capacity by 2023. The first binding for the first level of expansion of TAP took place earlier this year, allocating an incremental capacity of some 1.2bn cu metres annually starting this year. The second binding is expected later in 2023, and this will test the market requirements in a gradual process of building up capacity to a total of 20bn cu metres by 2027. However, EU companies that have shown an interest in buying gas via TAP must make a decision this year in order to import gas by 2027, as work will take at least four years to be completed.

Given the scale of investments necessary, Azerbaijan needs to make sure that the EU will continue to buy its gas; making the EU a partner in the upgrade would be one way of ensuring long-term co-operation. However, the problem is that the EU is unlikely to commit to a long-term gas deal, as gas consumption is forecast to decline in the long term, and this would go against decarbonisation targets and a long-term strategy for moving away from fossil fuels. The EU will also be able to import higher volumes of LNG when all the terminals being planned or developed come on stream.

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Mon, 10th Jul 2023 Article tags
EnergyPoliticsRegulationEuropeGlobalCountry Analysis