10th Southern Gas Corridor Advisory Council Ministerial Meeting and 2nd Green Energy Advisory Council Ministerial Meeting was held in Baku

The 10th Southern Gas Corridor Advisory Council Ministerial Meeting and the 2nd Green Energy Advisory Council Ministerial Meeting have been held at the Gulustan Palace in Baku.

President of the Republic of Azerbaijan Ilham Aliyev attended the event.

The head of state delivered a speech at the event.

Speech by President Ilham Aliyev

- Dear Prime Minister Mr. Rama. Dear Commissioner Madame Simson. Dear guests. Ladies and gentlemen.

First of all, I’d like to welcome Prime Minister Edi Rama and express gratitude to him for being with us at this important event. Albania and Azerbaijan are two friendly countries. We actively cooperate in different areas. We have a very active political dialogue. My meetings with Prime Minister have a regular agenda both in Albania and Azerbaijan as well as on the sidelines of the different international events. We support each other within international institutions and also work actively on energy security issues. Albania played a very important role in implementation of the Southern Gas Corridor project and continues to play an important role as a member of the TAP team. Now we are discussing different aspects of our energy cooperation. I'm sure that during today's discussions with Prime Minister, we will address all the outstanding issues.

I'd also like to express the gratitude to Madame Commissioner Simson for visiting us again. As you know, Commissioner Simson and the Minister of Energy of Azerbaijan are the co-chairs of the Advisory Council of the Southern Gas Corridor. They play an important role in bringing the big and growing team together, and, of course, an important role of EU in implementation of all our plans. The Azerbaijan-EU cooperation on energy diversification and energy security created the absolutely new geography of supplies.

During many meetings of the Advisory Council in the previous years, we always addressed the issue of energy security. Azerbaijan's position was very consistent -we considered it as an important factor of national security of every country. When we were talking about diversification, our position always was and is that it must be diversification of not only supply routes but also sources.

Today's geopolitical situation in Eurasia proves exactly what we needed to do. In case of Azerbaijan, the Southern Gas Corridor is absolutely a new route, with now many extensions and interconnectors. The Azerbaijani gas is a new source. So here, in this format, and in the project, which we initiated, we see full implementation of energy diversification issues.

Since we met last time, a year ago here at the Gulustan Palace, there have been several important milestones. As usually, during the Advisory Council Meetings, the group reviews what has been done and sees what additionally must be done to tackle all the outstanding issues and most importantly, plans the future mutual and common steps.

One of the important events during the last year period was the beginning of commercial natural gas production from the Absheron gas and condensate field in the Azerbaijani sector of the Caspian Sea. This was the second largest discovery of huge gas deposits after Shahdeniz. Actually, the Absheron gas and condensate field will be also a resource base for our future energy diversification projects. The first phase of Absheron project has been approved. We expect annual production at the level of 1.5 billion cubic meters. When we agree on the second phase, it will add an additional 4-5 billion cubic meters with the most of which to be also channeled to the international markets.

Another important achievement, I would say, is that Azerbaijan started supplying natural gas to two more countries last year, namely Hungary and Serbia, thus expanding the geography of our supplies in Europe. Today, Azerbaijan is supplying natural gas to eight countries with six of them being European countries. The interconnector projects have been inaugurated last year in Europe. Firstly, they were generated by the Southern Gas Corridor project. And secondly, they will allow us to continue our efforts in order to embrace as many destinations in Europe as possible.

The demand for the Azerbaijani gas is here. We have the resources, and transportation routes exist. By the way, through the active communication with our Turkish friends during the last year, we agreed on using the Trans-Balkan gas pipeline system through Türkiye. This is, I would say, the diversification inside the diversification project. There can be many more other alternatives and options because all of them serve the common goal of how to address issues of energy diversification and energy security with maximum efficiency.

Azerbaijan, I think, already proved to be a reliable partner. Our word means the same as our signature. All the plans, which we've put in front of ourselves, I'm sure, will be implemented because only the performance of the last year demonstrates that.

Another important moment for our energy project is that the company from the friendly United Arab Emirates, ADNOC became a shareholder of the Absheron project. We welcome that and welcome to the team. That will add additional financing and also expertise, and enlarge international cooperation. We have requests from many energy companies to work with us. All of them are being reviewed based on the performance and our energy agenda.

With respect to our future plans, of course, today it will be discussed broadly. I just want to mention some of them. First of all, we expect the beginning of the natural gas production in the first quarter of the next year from the Azeri-Chirag-Gunashli deep gas project. This is a very promising structure with a very large deposit. For many years, the Azeri-Chirag-Gunashli has been the main source of our oil exports. And now, with these huge gas deposits, which we already agreed with our partners to explore, it will be an additional contribution. In the beginning, the production is planned at around half a billion cubic meters, but it will grow maybe three-four, maybe, five times within several years, being an additional source to gas supply along with the Shahdeniz and Absheron.

We also have plans to develop the second phase of the Umid gas condensate field, which potentially can bring additional 2-3 bcm within 3-4 years.

So, all of these plans are absolutely realistic. They're based on a thorough analysis, data, information and our financial resources, as well as our agreements with our investors. Some of the projects will be implemented together with investors but some by SOCAR itself. All these demonstrate that potential is here and potential is growing.

So, all kinds of rumors, which have been circulating for many years that “there is no enough gas in Azerbaijan” to supply the growing needs of European consumers once again show that they are absolutely groundless. It was a part of the campaign against Azerbaijan in order to undermine our potential and to send the wrong message to the international community and consumers.

Azerbaijan is also part of the green transition process. This year has been announced and declared as the “Green World Solidarity Year” in Azerbaijan. Our renewable projects also demonstrate high-level of performance. Since we met last time, I would like to inform you that we inaugurated the first big solar power plant in Azerbaijan last October with a capacity of 230 megawatts, built by Masdar, one of the leading companies in the area of renewables. This is only the beginning. According to signed contracts and MOUs, we plan to generate up to 5000 megawatt or 5 gigawatt of solar and wind energy until 2030.

Our main investors are Masdar from UAE, ACWA Power from Saudi Arabia. Companies from other countries are also working with us. We have huge potential of renewables, whether it's in the Caspian Sea or our onshore potential. As you know, with the Black Sea green cable project, we plan to become also an important exporter of green energy to Europe.

It has already been decided that there will be integrated projects from wind farms in the Caspian Sea with new transmission lines extending all the way down to Europe under the Black Sea. So, these are the plans, and of course, the more renewable sources we have, the more natural gas we will save, which now we use for electricity.

It will be an additional contribution to the Southern Gas Corridor. The Southern Gas Corridor has already been operating for three years. It is a really success story. It is one of the biggest infrastructure projects in Eurasia. This project with the integrated pipeline system of 3,500 kilometers in length is a project of energy security and cooperation because without cooperation between all the countries, which are situated on route of the Southern Gas Corridor, it wouldn’t have been possible to implement this project.

So, we come to an important point where we see energy and fossil fuels as instruments and means to build partnership and cooperation. And the last point on fossil fuels issues. We now see kind of a trend that fossil fuel is something, which brings only problems. We also need to be fair with the countries rich with oil and gas. It is not the fault of these countries that they have oil and gas. They must not be blamed for that and discriminated. I think that the performance of countries with fossil fuels must be judged by how they address the issue of environmental protection and green transition. Only after that, after the fair analysis, the judgment can be made about these countries. Otherwise, we will see a kind of dividing lines between oil and gas producers and those who do not have these resources.

Talking about that, of course, I'd like also to draw your attention to the issue of financing. Taking into account that we have representatives of the leading financial institutions of the world here, at this table, the financing of the expansion of the Southern Gas Corridor and any other project related to natural gas must be done in such a way that our main target is not undermined.

There was and there is a big demand from Europe for Azerbaijani gas. We have been approached by many countries. As I said, six are already recipients of our natural gas.

There are several more with which we have negotiations. The gas is needed and we have the resources and infrastructure. I think that at least financing of this project from European financial institutions must be done based on a realistic approach and should not be overshadowed by general anti-fossil fuel trends.

We all know what is happening. Azerbaijan, as I said, is in an active phase of green transition, but at the same time, no one can ignore the fact that without fossil fuel, the world cannot develop, at least in the foreseeable future.

And the last point. Azerbaijan has an honor of being the host country for COP29. As soon as the decision was made last December, immediately, we were attacked by different NGOs, media, etc., only for one reason - because we have oil and that was considered to be our biggest fault. Though, as I say, it's not a fault, it's a gift from the God. But we've been attacked that “how can a fossil fuel-rich country be a host of COP?”. And let's look at it from a different angle. Yes, we have enough oil and gas. We can live without renewables for coming 100 years. All our reserves are proven. Everybody knows that.

But the fact that we wanted to host this global event on climate change demonstrates our will. We must be praised for that and not attacked. We didn't do anything wrong. But as soon as the decision was made, immediately, we faced a coordinated, consolidated and very unfair attack on us.

There have been many attacks on Azerbaijan in the previous years. We have a very thick skin. We can protect ourselves, but I just want to inform you that the decision and unanimous decision to organize COP29 in Azerbaijan is a sign of respect of international community for our country and our willingness to host and contribute demonstrates our green agenda.

So, I will conclude now, once again, thank you for being with us. Using this opportunity, I'd like to invite you all to be our partners on this important journey to COP29. Thank you.

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Minister of Energy of Azerbaijan Parviz Shahbazov:

- Your Excellency President Aliyev, we thank you for your invaluable speech. The Advisory Council, established on your initiative, has greatly contributed to energy security through the Southern Gas Corridor. Today, this remarkable cooperation platform is being expanded in line with your vision on the development of green energy. We express our sincere appreciation for your continued support. Now, I would like to give the floor to His Excellency, Mr. Eddie Rama, Prime Minister of Albania. The floor is yours, Mr. Prime Minister.

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The Prime Minister of Albania made a speech at the event.

Speech by Prime Minister Edi Rama

- Honorable President Aliyev, dear friend. Dear friends.

I cannot be more humbled from the hospitality offered to me today, and I cannot be more honored from the words the President used to describe the nature of relations between Azerbaijan and Albania, and also of our personal relations.

Eight years ago, in the ministerial meeting, President Aliyev said, and I quote: “The Southern Corridor establishes a unique format of international cooperation. This new experience of cooperation between countries, companies and financial institutions will greatly expand into many other areas throughout the years.” Mr. President predicted.

And indeed, this New Silk Road of Energy, the Southern Gas Corridor has become a bridge of intensive cooperation, bringing closer countries, companies, international financial institutions in a format that only increases the desire and opportunities that it offers. And today this format has become a bridge - a bridge where the integral new dimension is green energy.

So, today, we can all witness the Southern Gas Corridor has already changed many lives and made Europe safer. While Europe is ramping up its energy supplies, the Southern Gas Corridor by no doubt will remain one of the few stable and competitive sources of pipeline gas delivered to the EU. With the share of Russian gas in the EU falling from 40% to currently eight and soon to be zero, and with the green agenda and decarbonisation efforts in full swing, Azerbaijani gas us and the Caspian region are crucial to our shared future.

As far as my country, Albania is concerned, we are strategically positioned along the route of the Trans-Adriatic Pipeline, which is a vital link in the Southern Gas Corridor. And of course, we aim to further capitalize on this transformative corridor through direct investments in renewable energy projects and the development of sustainable infrastructure. As we speak today, Albania is 100% renewable-based country. But, what we need to do, and what we are doing, is to diversify our source of energy, which is based mostly on hydro.

For us investments in sustainable renewable energy are by no doubts crucial. In recent years, they have turned Albania into a natural place of the green transition and innovations in the energy sector. In this regard, initiating dialogues on green hydrogen within the context of the Southern Gas Corridor is so important.

And it proves once and again the value of this visionary initiative. Firstly, it provides a tool to address environmental concerns and align the corridor with global sustainability goals. Secondly, embracing green hydrogen opens up new economic opportunities, fosters innovation, research and development in the clean energy sector. And lastly, it positions the corridor as a forward-thinking initiative responsive to the evolving demands of a world increasingly focused on de-carbonization.

Let me share with you also that our Azerbaijani friends have been truly invaluable with their technical expertise in developing the best possible scenarios for utilizing our existing infrastructure and adopting it to meet the current energy challenges, and we can't be more grateful for that.

Right now, in Albania we are also pushing forward towards the country's gasification project. And thanks to the support of President Aliyev, we have started this process of gasification by countering what historical tradition has deprived us because for them who are not aware of our history, we have been completely cut from the West and the East, and pretending to be the only country in the world to fight for true communism. We refuse to have any relation with both American imperialism and Soviet social imperialism. So we lived in North Korea, in the middle of Europe, and practically all our systems from the gas systems to the railway systems were nearly in existence and totally disconnected with the rest of the world.

That's why we value very much this new chapter in our development course. And building on a successful experience of cooperation with TAP In cooperation with our partners, we aim to build an liquid gas hub in the south Albania.

Ladies and gentlemen. Marco Polo, described how Baku was dotted with oil wells, and oil was extracted to be used for lighting and for healing purposes. But it was in the year 1877 when Charles Marvin demonstrated irrefutable proof that long before Christ was born, oil was exported from the Absheron peninsula where Baku is located to territories of modern Iran, Iraq, India and other countries.

In the past, Baku’s immense wealth supported the golden era of Asian and European civilizations. Now the same resources, the same gas fields have potential to open a new golden era for our countries. It is an era of multilateral cooperation, long-lasting peace and progress based on decarbonisation, and sustainable energy supplies.

And let me conclude by joining President Aliyev in what he underlined when he mentioned the initiative of Azerbaijan to take over the torch of the COP and to host it. It can't be more revealing, when a country so rich in fossil fuels, step up and says let's look forward all together about how the green energy transition can be real, can be sustainable, and can be beneficial to all the rest of the world. And this is where the biggest praise should come to Azerbaijan. And to our incredibly valuable host. Thank you very much, Mr. President. Thank you.

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European Commissioner for Energy, co-chair of the Southern Gas Corridor Advisory Council Kadri Simson addressed the event.

Speech by Kadri Simson

- Thank you. President Aliyev and Prime Minister Rama, Excellencies, Ladies and Gentlemen! I'm delighted to be here today to open the 10th Advisory Council Ministerial meeting. Let me start by congratulating President Aliyev on his re-election and his success at the recent presidential election. I also want to thank Minister Shahbazov for our good cooperation throughout last year. As always, thank you all for your warm welcome here in Baku.

This is my third Southern Gas Corridor meeting as EU Energy Commissioner. And it is a good time, dear President Aliyev, to look back and measure together what this project and the EU-Azerbaijan partnership have become in such a short space of time. I came into office, on 1 December 2019, the day after the inauguration of the TANAP gas pipeline connecting to Europe. The first flows of Azerbaijani gas to the EU started one year later, on 31 December 2020. It was during COVID, contacts were difficult. Some in Europe thought that the Southern Gas Corridor was mission accomplished and would not require much attention going forward. I did not think that way. We always saw in Azerbaijan a trusted partner and in our cooperation a strong potential for expansion. When I came to my first meeting here in 2022, we discussed how best to tap into all the potential in our relations, how to expand the corridor to new markets, how to enlarge the scope of our relations to clean energy. And we made it happen.

Today, gas flows to Europe from the Southern Gas Corridor are 46% higher than in 2021. In 2023, the EU received almost 11 bcm of stable and secure gas supplies from Azerbaijan. And a growing number of EU Member States and enlargement countries are interested in receiving gas from Azerbaijan. As I said last year, you are becoming a pan-European supplier. That's why we are working on further extending these volumes together. We expect pipeline gas from Azerbaijan to play an important role in the European energy system during our energy transition. Faced with increased Russian violence and a continued unjustified war on our doorstep, it is increasingly clear that, for Europe, there will be no return to business as usual in its energy relations with Russia. That space is now filled by other trusted and reliable energy partners. And we found exactly that in Azerbaijan. I can assure you that the EU commitment to Azerbaijan is long-term. Which is why we are working with Azerbaijan on expanding the Southern Gas Corridor and doubling our gas trade by 2027. More importantly, the EU and Azerbaijan's strategic energy cooperation has shown all its flexibility and dynamism.

The Southern Gas Corridor has evolved to become a forum for cooperation also on renewables and electrification. This is an extraordinary result and is proof of how this project is forward looking and open to the future. We have made clean energy a key part of EU-Azerbaijan bilateral relations. We're here in the City of Winds – just one example of the tremendous renewable energy potential on the Caspian Sea. Azerbaijan joined the EU and other international partners at COP28 in supporting the Global Pledge on tripling renewable energy and doubling energy efficiency by 2030. And this international pledge is matched by a clear commitment at home to create better conditions for international trade and investment and accelerate the national energy transition. I welcome the reforms adopted in this area over the past year. Indeed, we see now a growing interest from EU renewable companies to work with Azerbaijan and in your country. The signature of the Memorandum of Understanding with EU wind companies in the margins of this Ministerial is a very important step. And this commitment to renewables is also opening the way to new interconnection projects with Europe.

We will discuss later today the project of a green energy corridor between the South Caucasus and the EU. The initiative to build an electricity cable under the Black Sea is especially important for the region. It also positions Azerbaijan as a key partner for future electricity exports to the EU. This is critical given we expect electricity consumption in the EU to grow by more than 16% by 2030 and then again by almost 80% by 2040. And it is not a coincidence that Azerbaijan has been chosen to host the next annual UN Climate Change Conference in November. This is the result of your hard work, your ability to deliver complex infrastructure projects, your forward looking approach to the clean transition. I have no doubts President Aliyev that you and your team will guide us to a successful outcome of COP29. You can certainly count on the EU's full support.

We are ready to work with you and other interested partners on a clear strategy to implement the pledges on renewables and energy efficiency. We also stand ready to tackle together methane emissions from the oil and gas industry – both bilaterally and through the Global Methane Pledge. I think there is scope to explore innovative approaches under our strategic energy partnership to make progress in this field.

Your Excellencies, Ladies and Gentlemen! Over the past years, the Southern Gas Corridor has been a story of success. A story which has new protagonists. I am particularly pleased to be next to Prime Minister Rama today, and to see so many officials from the Western Balkans and South East Europe around the table. I am pleased that the EU and Azerbaijan have built such a positive relationship. You are and will remain one of our key energy partners. We look forward to continuing the work we started with all the Southern Gas Corridor partners. Together, we can accelerate our energy diversification, ensure prosperity for our economies and deliver a viable path towards climate neutrality.

Thank you once again, President Aliyev, for the very warm welcome, and thank you everybody for your attention.

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Parviz Shahbazov: Commissioner Simson, thank you for your active co-chairmanship in the Advisory Council and for your support for the development of our energy cooperation. This concludes our opening session.

Mr. President, Mr. Prime Minister, thank you very much for being with us today.

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The opening ceremony was followed by panel sessions.