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Akbar Novruz

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The World Bank has postponed the approval of a $15 million project designed to reduce methane emissions across Azerigaz's gas distribution network, moving the decision date from July 28 to August 6, according to information published on the bank's official website, AzerNEWS reports.

The "Azerigaz Gas Leak Detection and Repair Facility" aims to reduce methane emissions caused by leaks in the gas distribution system operated by Azerigaz while strengthening the company's asset management capacity.

According to the World Bank, the project will establish a dedicated financial mechanism to support Leak Detection and Repair (LDAR) activities within the Azerigaz network.

"The project envisages the establishment of a financial mechanism managed by the recipient for the detection and repair of gas leaks in the Azerigaz gas distribution system. The mechanism will be launched with an initial grant from the Global Partnership for Flaring and Methane Reduction (GFMR) Trust Fund," the bank said.

Under the proposed structure, SOCAR will serve as the grant recipient and holder of the grant account, while Azerigaz will act as the sole beneficiary and implementing agency responsible for the day-to-day execution and management of the project. Funds will be transferred from SOCAR to Azerigaz to finance agreed leak detection and repair activities aimed at gradually reducing methane emissions.

The World Bank noted that the initiative builds on the experience gained through the Baku Gas Leak Baseline Pilot Program.

"The works to eliminate gas leaks will be proposed and implemented by Azerigaz in accordance with pre-agreed selection criteria. The proposed measures will be prioritized based on cost, complexity, efficiency and other relevant criteria to ensure maximum emission reduction for each US dollar invested," the bank stated.

It added that a key element of the mechanism is ensuring its long-term sustainability.

"In order to achieve a long-term effect, one of the key elements of the proposed financial mechanism will be to redirect a large part of the financial benefit from gas savings achieved after eliminating gas leaks to the same mechanism. This will allow for additional capital to be raised for the future modernization of Azerigaz's assets," the World Bank said.

The project comes as Azerbaijan continues to expand efforts to curb methane emissions across its energy sector.

Earlier, a source in Azerbaijan's oil and gas sector told Trend that the country is implementing a broad range of initiatives covering the entire energy value chain.

"The application of the Methane AI platform for the digital management of methane emissions, Azerbaijan's joining the OGMP 2.0 initiative to increase emissions monitoring, accountability and transparency are part of these efforts. Other projects include the Leak Detection and Response (LDAR) program, the methane emissions assessment project using unmanned aerial vehicles implemented in collaboration with TotalEnergies, methane emissions monitoring using GHGSat satellite technologies within the Oil and Gas Climate Initiative (OGCI), as well as the Advancing Global Methane Reductions (AGMR) initiative implemented in collaboration with BP," the source said.

Separately, Cristina Lobillo Borrero, Director-General of the European Commission's Directorate-General for Energy, highlighted the importance of Azerbaijan's methane reduction efforts in an exclusive interview with Trend.

"Azerbaijan has joined the Global Methane Pledge, and SOCAR has been a participant in the Oil and Gas Methane Partnership 2.0 program since 2024. This creates a solid foundation for practical cooperation in the areas of measuring, reporting and verifying emissions, detecting and eliminating leaks, as well as regular flaring and reducing gas emissions. This is not only about climate policy. It is also about increasing efficiency, reducing losses and modernizing the oil and gas sector," she said.