The Southern Gas Corridor (SGC) project allows Azerbaijan to diversify its gas markets, Analyst at the Russia’s National Energy Security Fund, Expert at the Financial University under the Government of the Russian Federation Igor Yushkov told Trend.
Yushkov noted that if for Azerbaijan this project is a means of diversifying the markets for its gas, then for Turkey and European countries, SGC is the means of diversifying sources of supply.
TANAP gas pipeline to Turkey was built in 2019, and gas supplies through pipeline commenced. Greece and Bulgaria will receive one billion cubic meters of gas each, and about 6-8 billion cubic meters, after the completion of the gas pipeline, to Italy.
The expert said that Azerbaijan is the only source of gas for SGC. Initially, the SGC, as a European project, meant obtaining a large amount of gas with the possibility of expansion. The main volumes should have been given by Turkmenistan.
Gas was supposed to go through the Trans-Caspian Gas Pipeline to Azerbaijan, then volumes of Azerbaijani gas would be added to the gas pipeline and through a gas pipeline with great capacity all this gas would go through Turkey to Europe. This project was perceived as an element of the European strategy for diversification of gas supply sources, Yushkov added.
At a meeting of the SGC Advisory Council held in Baku in February 2019, the EU and Azerbaijan invited Turkmenistan to join the SGC project. However, so far no concrete decision has been made.
"Thus, Azerbaijan is currently the only source of gas in this system. The resource base for the project is the Azerbaijani Shah Deniz gas condensate field on the shelf of the Caspian Sea," the expert said.
Speaking about the current situation in gas markets, Yushkov noted that, despite fierce competition among gas suppliers, the Turkish market shows an example that this did not affect the price and volume of Azerbaijani gas purchases by Turkish consumers, since the contract was signed a long time ago.
The expert expressed confidence that it is now important for Azerbaijan to consolidate the gas supply agreements on the Italian market at the same prices, while it is beneficial for Italy to reconsider the indices in the pricing formula in favor of a greater binding to spot markets.
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