Azerbaijan Begins Gas Supply to Slovenia, Expands Footprint in Europe

State Oil Company of Azerbaijan Republic (SOCAR) has started delivering gas to Slovenia, according to a recent announcement from the company.

The first commercial gas shipments were launched based on a memorandum of understanding signed between SOCAR and Geoplin, Slovenia’s leading natural gas company, on July 17.

Slovenia became the ninth country to receive Azerbaijani gas, joining the ranks of Türkiye, Georgia, Italy, Greece, Bulgaria, Romania, Hungary, and Serbia. Slovakia, Montenegro, North Macedonia, Bosnia and Herzegovina, and Croatia are exploring the opportunities to purchase natural gas from Azerbaijan.

The natural gas supply agreement with Slovenia marks another strategic step in SOCAR’s efforts to enhance its footprint in the European energy market, reaffirming the growing importance of Azerbaijan's energy resources in the region.

European nations have become increasingly interested in Azerbaijan's energy resources due to the ongoing Russia-Ukraine conflict. Russia curtailed its gas exports to the EU in response to Western sanctions, leading to a greater demand for Azerbaijani gas in the European markets.

Azerbaijan’s Energy Minister Parviz Shahbazov announced on the X platform that more than 1.5 billion cubic meters (bcm) of gas has been produced from the Absheron gas-condensate field since its initial production phase in July of the previous year. Shahbazov noted that the phased development of the Absheron field, alongside plans to boost annual production from 1.5 bcm to 6 bcm, will significantly bolster the energy security of Azerbaijan and its regional and European partners.

In the first half of this year, Azerbaijan supplied 6.4 bcm of gas to Europe, 5 bcm to Türkiye and 1.3 bcm to Georgia. In January-June, gas sales abroad increased by approximately 6 percent compared to the corresponding period of the previous year.

In 2023, Azerbaijan exported 11.8 bcm of gas to Europe via the Southern Gas Corridor (SGC) pipeline. This volume is anticipated to rise to 12 bcm in 2024. By 2027, following the planned two-stage expansion of the SGC, the export volume is expected to reach 20 bcm.

Azerbaijan has been delivering natural gas to Europe through the Trans Adriatic Pipeline (TAP) since December 31, 2020. TAP constitutes the final segment of the Southern Gas Corridor (SGC) and stretches over 773 kilometers onshore and 105 kilometers offshore, originating at the Turkish-Greek border, traversing Greece and Albania, and culminating in Italy.

The SGC consists of three segments, spanning seven countries and six regulatory systems. It connects 11 different investors and supplies natural gas to 12 distinct buyers, primarily in Europe. Initially, the pipeline’s annual transportation capacity was 16 bcm, shared between Türkiye and Europe, with 6 bcm and 10 bcm, respectively. The primary source of natural gas for the SGC is Azerbaijan’s offshore Shah Deniz field, which holds approximately 1.2 trillion cubic meters of proven reserves.

Currently, the European market accounts for the largest portion of daily gas exports from Azerbaijan.