BAKU: Azerbaijan’s gas output is expected to surpass its oil production by the end of the decade, driven by significant field developments and increased export capacities, according to a recent analysis by Rystad Energy.

According to Trend News Agency, an independent research and business intelligence firm, the country’s gas sector is experiencing robust growth, with plans to boost annual gas output by 51% to 40 billion cubic meters by 2030 compared to 2020 levels. This surge is facilitated by several key gas and gas-condensate field developments. “Azerbaijan has lined up several key gas and gas-condensate fields for development to further raise its gas production,” Rystad Energy noted. The firm predicts that this increase will result in gas production volumes surpassing those of oil in the coming years.

The significant boost to the gas sector began with the commencement of Shah Deniz Phase 2 in 2018, which increased the country’s sales gas production by 83% from the previous year to nearly 36 billion cubic
meters. Shah Deniz contributes approximately 72% to the national gas output. Following this, gas exports have also seen a substantial rise, from 9.6 billion cubic meters in 2018 to around 24 billion cubic meters last year, with about half of these exports directed towards Europe, and the remainder to Turkey and Georgia.

In the latter half of 2022, Azerbaijan signed a memorandum of understanding that aims to double its gas export volumes to Europe to 20 billion cubic meters by 2027, with Shah Deniz expected to play a crucial role. To support this increase, plans are underway to enhance the capacities of several pipelines. These include doubling the Trans Adriatic Pipeline (TAP) capacity to 20 billion cubic meters annually, increasing the Trans Anatolian Pipeline (TANAP) from 16 to 31 billion cubic meters, and expanding the South Caucasus Pipeline from 24 to 31 billion cubic meters.

“These pipeline expansions are costly and will require significant investments,” Rystad Energy pointed out. “Azerbaijan’s ambiti
on to raise gas exports will require long-term commitments and commercial gas sales agreements from European buyers.” The realization of these projects will depend on various factors, including economic considerations, alternative gas supply sources and routes to Europe, and potential geopolitical developments.

Recent data from the State Statistics Committee indicates that Azerbaijan’s gas production reached 33.03 billion cubic meters from January through August 2024, with 25.123 billion cubic meters categorized as commercial gas. In comparison, during the same period in 2023, the country produced 32.2 billion cubic meters of gas, of which 24.1 billion cubic meters was commercial. For the entirety of 2023, Azerbaijan’s gas production totaled 48.5 billion cubic meters, marking a 3.8% increase over the previous year. Meanwhile, operational data from the Ministry of Energy reveals that oil production, including condensate, amounted to 19.3 million tons from January to August 2024, reflecting a 4.9% decline comp
ared to the same period in 2023.