EU and Azerbaijan mull gas deal away from Russia


BRUSSELS, July 14 (Reuters) – The European Commission has offered EU countries a deal with Azerbaijan to increase natural gas imports and support the expansion of a gas pipeline to do so, a draft document shows. consulted by Reuters.

The draft memorandum of understanding, which must be approved by the governments concerned and could still change, is part of the European Union’s efforts to reduce dependence on Russian gas after the war in Ukraine.

“The parties aspire to support bilateral trade in natural gas, in particular through the export to the European Union, via the Southern Gas Corridor, of at least 20 billion cubic meters of gas per year by 2027, consistent with commercial viability and market demand,” the document, dated July 11, said.

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The Trans-Adriatic Gas Pipeline, the final stage of the Southern Gas Corridor pipeline network, brought more than 8 billion cubic meters of Azerbaijani gas to European countries like Italy last year.

The draft says the two parties will encourage funding for the expansion of this network to increase deliveries to Europe, adding that these investments should be able to transport low-carbon gases in the future to avoid block out years of planet-warming emissions.

An increase in deliveries would also force Azerbaijan to increase its domestic gas production.

The draft stressed the importance of “long-term, predictable and stable contracts” to ensure the security of gas producers. But he also said future gas contracts should align with EU climate change targets, which Brussels says will require a drop in gas use, particularly after 2030.

Both sides should step up action to reduce emissions of methane, a potent greenhouse gas, in their supply chains, including through incentives to collect gases that would otherwise seep into the atmosphere, he said.

Concerns over further cuts to Russian gas supplies grew this week as planned maintenance began on the Nord Stream 1 pipeline carrying gas to Germany. Governments and businesses have warned that Moscow could prolong the blackout.

The draft agreement indicates that the EU and Azerbaijan will also examine the development of electricity interconnections, to promote renewable energies and will discuss the future trade in hydrogen.

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Reporting by Francesco Guarascio, Kate Abnett; Editing by Kirsten Donovan

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