9th Southern Gas Corridor Advisory Council Ministerial Meeting and 1st Green Energy Advisory Council Ministerial Meeting kicked off in Baku

The 9th Southern Gas Corridor Advisory Council Ministerial Meeting and 1st Green Energy Advisory Council Ministerial Meeting have kicked off at Gulustan Palace in Baku on 3 February. 

President of the Republic of Azerbaijan Ilham Aliyev attended the opening ceremony.

The head of state addressed the event.

Speech by President Ilham Aliyev

- Dear President Iohannis,

Dear Commissioner Simson,

Dear guests, ladies and gentlemen.

First of all, I’d like to welcome President of Romania, who is on an official visit to Azerbaijan, and express gratitude for his participation at today’s important event. This once again demonstrates the importance Romania is paying to the issues related to energy security. Our future joint steps will be done in close coordination between our two countries, which are strategic partners.

I also would like to especially express gratitude to Madame Commissioner Simson for continuing support to all our initiatives, for every efficient co-chairing of the Advisory Council of the Southern Gas Corridor and for her contribution to successful implementation of this important project.

Today we gathered for the ninth time. And, of course we have a lot to talk about, to review what has been done, as we usually do, and, of course, the most important to plan our future steps.

A lot has changed in the world since the 8th Advisory Council of the Southern Gas Corridor, which was held here a year ago. The world has changed. Energy security issues became more and more important for every country. And as we usually said during the meetings that energy security is really the matter of national security. And all what has been done by our joint efforts with respect to building new routes and engaging new sources now seems to be much more needed than ever before. And it was good that we did everything on time. We did not lose time though there has been certain delays during the implementation of the Southern Gas Corridor project. But, in general, we were just very committed to complete it as soon as possible and now, by the way, we already talk about expansion.

The Southern Gas Corridor was inaugurated only something more than two years ago, but already today we talk about expansion of TANAP from 16 to 32 billion cubic meters and expansion of TAP from 10 to 20. This really demonstrates the big need for alternative source of energy. This demonstrates the big need for continued diversification of energy supplies and we are ready for that. So, all what has been done by our joint efforts in previous years, today it is at our disposal and our team is becoming bigger. We have more flags today in this room and more distinguished guests.

There have been several important milestones last year, which demonstrates our joint commitment to energy security. First of all, I’d like to mention the important document, which was signed here in Baku between President of the European Commission Madame Ursula von der Leyen and myself on strategic partnership in the field of energy which was signed last July and which actually is a clear roadmap for our future plans. So, we plan by 2027 to double our gas export to Europe and this is doable, because we have resources. We have mutual political will, and we have a very high level of mutual trust. So, one of the important factors of successful implementation of the Southern Gas Corridor project, apart from technical and sometimes political issues to be resolved, is the high level of mutual trust and I would even call it a mutual solidarity. When we immediately are seeing that someone is in need, we are trying to support. I think this is a good spirit of partnership and should be a guidance for us in our future endeavors. Especially now, when along with the Southern Gas Corridor Advisory Council, we will have today the first Advisory Council on green energy.

Another important milestone was inauguration of Interconnector between Greece and Bulgaria, which of course was generated by the Southern Gas Corridor project and is to a certain degree its extension, which allowed us to start supply natural gas to Bulgaria and also consider expansion through that extension, through that interconnector to the neighboring countries.

Of course, December was a remarkable month for energy security because of two important events. First, signing of an agreement between Azerbaijan and Romania on gas supply, and the gas supply will start soon. So, Romania joins the team of countries part of the Southern Gas Corridor. And also, singing of an agreement on green energy development and transmission between Azerbaijan, Georgia, Hungary and Romania, which will create additional synergy for our efforts and will actually open a new chapter in energy security. So, these were important milestones.

If we talk about this year, this January, we signed the MoU between Azerbaijan and Hungary on gas supplies. So, this even expands the number of countries, members of our team. And all that is due to, first, close political relationship between the countries involved. Active coordination and efficient chairmanship by the European Commission and Azerbaijan of our efforts, and also, is a reflection of energy dialogue, which has started and was formalized between the European Union and Azerbaijan, which embraces natural gas, electricity, hydrogen, green hydrogen. I think this is a very unique, and very efficient format for our cooperation.

So, as soon as the MOU with the European Commission on increasing of gas supply to Europe was signed, we started in Azerbaijan to work actively to look for additional opportunities to supply more gas. Now, apart from expected production from new fields, which we expect, for instance, this year, and increase of production from existing Shahdeniz field, which definitely is the case, we also work on energy efficiency domestically. We are working on a program of reduction of losses. We are working on the program of combination of our domestic needs with respect to electric energy and natural gas to save more gas, which we are using now to generate electricity in Azerbaijan for export.

Our natural gas export is growing. In 2021, it was around 19 billion cubic meters. Last year it was 22.6. And this year we expect 24.5. So that means that the MOU with the European Commission is successfully implemented. We not only increase the production, we increase export and we expand the geography. And I'm sure that today the countries, which are involved in this project, will see and already see the benefit of it. And also it allows through different other connections and potential interconnectors to connect many more countries in Europe.

With respect to the resources of natural gas, I many times already said that we have natural gas reserves, which will be enough for us and our partners for at least 100 years. Today, we are, of course, looking forward to having the first Advisory Council on the green energy. The team is relatively small.

We have four countries, but with the potential to grow. Because we think that not only the governments, but also the companies will be interested in participation in this important initiative. At the first Advisory Council, of course, the conceptual issues must be addressed. How we will form our activity? What will be the responsibility of each country? How private companies can be involved? Whether it will be a consortium of companies or each country will do its part of work on its sovereign territory? So, these are all issues to be addressed and agreed. Because it’s not only to produce the renewable sources of energy from Azerbaijani offshore and onshore fields and also to build a new transmission line to our border with Georgia, but also to build a cable under the Black Sea.

Therefore, we need to properly structure our plans and see who can be potential investors. And of course, we are looking forward to continuing our cooperation with the international financial institutions. I’d like to take this opportunity to express gratitude to the governments of countries, which are our partners - Turkiye, Georgia, Greece, Bulgaria, Albania, Italy, our new partners Romania, Moldova, Hungary.

Special gratitude to the European Commission for continued support and great leadership. Also, I’d like to express many thanks to the governments of the United States and United Kingdom for continuous support of our initiative and providing strong framework for broad cooperation, including investments opportunities and financing.

The companies, which are involved in this process, especially SOCAR and bp, two leading companies, which have already a strategic relationship for 30 years, and at least 30 years to come, and leading financial institutions whose representatives are present today - World Bank, EBRD, ADB, AIB, Asia Infrastructure Investment Bank, IFC. So, all the leading financial institutions are with us, and we hope that we will continue our fruitful cooperation also in the areas of renewables.

Today, in Azerbaijan, together with our investors, Masdar and ACWA power, we jointly implement two investment projects of solar and wind power generation of a total of 470 megawatts. One project, which is already in the pipeline with bp, which soon will start to be implemented in the liberated territories of Jabrayil district of 240 megawatts that will be total of 710. And if everything goes according to our plans, within one year, one year and a half, we will have this capacity, and that will save hundreds of millions of cubic meters of natural gas for export.

With respect to the plans for renewables, only with apart from what I already said, only with three major energy companies, we have agreed and signed MoU and agreements to produce up to 25 gigawatts of renewable energy offshore and onshore solar and wind. Masdar 10, Fortescue 12 and ACWA power today will be a ceremony 2.5 additional to what has already been signed and being implemented. So, this is really a huge potential.

Therefore, when we are talking about Black Sea cable we need to plan it in stages, and also to coordinate it with demand in Europe. And, of course, to see a broad picture of our potential cooperation in European continent. Because I'm sure that Romania and Hungary will not be as a final destination for green energy.

The potential of Azerbaijan’s green energy also is available. It has been already confirmed. Only offshore wind potential is 157 gigawatts, onshore wind and solar 27, up to 10 gigawatts of potential of wind and solar we have in the territories, which we liberated something more than two years ago as a result of the Patriotic War. And also we have discovered the big potential in the Nakhchivan Autonomous Republic, and now we are in the process of negotiations to evaluate the opportunity to build a 500 megawatt solar power station. And I think there'll be even more capacity. So, this is what we have.

Now we have already good records of achievements on gas distribution. We have signed an agreement on green energy. We should create the synergy between natural gas and renewables and look at it as a package. We have a strong political will, and also we have a good success story. Because so far, all the projects, which we jointly implemented in different formats with different countries, whether it was Baku-Tbilisi-Ceyhan oil pipeline, Baku-Tbilisi-Erzurum gas pipeline, Southern Gas Corridor, all of them were successful.

I'm sure that our future plans to increase our presence with natural gas on European continent and our future plans with renewables also will be successful. For that we need to continue team work, for that we need to continue to support each other. I'm sure next time when we meet in Baku next February, we will talk about new achievements. Thank you for your attention!

Minister of Energy of Azerbaijan Parviz Shahbazov:

- Your Excellency Mr. President, on behalf of the participants of the Advisory Council, we are honored to extend our sincere gratitude to you for your deep and insightful speech.

The Advisory Council established on your initiative has ensured the successful realization of the Southern Gas Corridor and continues its contributions towards the expansion of the project. Today, once again, thanks to Your strategic vision and your initiative this cooperation format is expanding into green sphere. Thank you Mr. President one more time.

The participation of the President of Romania, His Excellency Mr. Klaus Iohannis in our meeting today has a special meaning. Starting this year, Romania will be importing Azerbaijani natural gas. Furthermore, Romania is one of our main strategic partners in green energy initiative. I would like to pass the floor to His Excellency Mr. Klaus Iohannis, President of Romania. You have the floor Mr. President.

The President of Romania addressed the event.

Speech by Klaus Iohannis

- Thank you.

Dear Mr. President Ilham Aliyev,

Madamme Commissioner Simson,

Distinguished ministers, high officials and representatives.

First of all, thank you for the opportunity to address this prestigious annual meeting dedicated to the Southern Gas Corridor. I’m delighted and honored to be with you today. This is already Romania’s sixth participation. I would like to thank in particular President Ilham Aliyev for extending invitation and for hosting us in Baku.

The Southern Gas Corridor has proven, beyond any doubt, in the two years since it became operational, its strategic importance to Europe's energy security. We have to commend all those who showed vision, political will and determination to make this corridor a reality. The corridor becomes even more important at this particular time when Russia's war of aggression against Ukraine has drastically changed the political, geopolitical context, especially when we talk about energy security. Against this background, the European Union and the member states have taken decisive steps to substantially reduce the dependence on unreliable gas sources as they carry a geopolitical price tag that is just too high to pay.

This strategic course of action towards trustworthy partners such as Azerbaijan has been long advocated by Romania and we have enjoyed the benefits of the strategic partnership between Romania and Azerbaijan since its launch in 2009. The answers to Europe's energy questions involve solidarity, regional cooperation and diversification of sources and transport routes. These are key principles, which are encapsulated by projects such as the Southern Gas Corridor.

Ladies and gentlemen, we have all faced unprecedented energy challenges in 2022, gas shortages or lack of affordable gas supplies, price volatility, market turbulence. These challenges required complex policies and regulatory shifts. The gas from Azerbaijan delivered through the Southern Corridor came as a safety net for many states in the region. The assurance is given by Azerbaijan, personally by President Aliyev on the availability of Caspian gas for the European market have provided much needed stability and predictability at a very stressful juncture for the markets.

The conclusion of the Memorandum of Understanding on a strategic partnership in the field of energy signed by the European Union and Azerbaijan in July 2022 opens the way for further cementing the role of the Southern Corridor, as an essential component of the EU diversification strategy. Since the very beginning, Romania has recognized the important contribution that Azerbaijan and the Southern Gas Corridor bring to fulfilling Europe's energy needs. Romania has pledged its continuous commitment to be part of the efforts aimed at developing and expanding the corridor towards new markets in central and Southeast Europe. We remain highly interested in accessing additional volumes of the Caspian gas to cover our own growing national consumption.

Ladies and gentlemen, in the recent years, my country has made substantial investments in developing gas transit capacity and connectivity with neighboring countries. First, we have laid the brand new transport infrastructure across Romania, the so-called BRUA gas pipeline and completed the upgrade of interconnectors with Bulgaria and Hungary. Second, Romania’s company Transgaz has joined forces with gas transmission systems operators in Greece, Bulgaria and Hungary for the development of the vertical corridor. The renewed Memorandum of Understanding signed by the four companies in December 2022 will enable bi-directional gas flows between South and Central Europe through Romania enhancing the security of supply in the whole region. Third, since January 2022, and also as a result of investments made by Romanian gas transmission operator, the Trans-Balkan gas pipeline can operate in reverse flow mode. This provides an alternative supply route to gas volumes from Azerbaijan through Turkiye, Bulgaria and Romania and onwards to markets downstream.

I would like to highlight here an important project for Romania, which carries a strategic significance to our neighbor, the Republic of Moldova. The gas pipeline connecting the Romanian gas network to the capital city of Chișinău has been commissioned in October 2021, is now fully operational. The pipeline can carry enough gas to cover the yearly consumption of right bank Moldova. Summing up, all these consistent efforts and solid investments made by Romania offers solid options for expanding the Southern Gas Corridor towards new markets in Southeast Europe and Central Europe. This is a win-win situation. The geography of Azerbaijan gas exports is diversifying while strengthening Europe's energy security.

Dear participants, natural gas remains a critical complementary element in supporting that decarbonization process. Within the European Union, Romania has been actively advocating for the inclusion of natural gas and nuclear energy in the green taxonomy as essential technologies in the transition process to a carbon-free economy, with thus, see a predictable and long-term use of natural gas in the European Union's economy.

Romania is currently a significant producer of hydrocarbons in Europe. A role that we intend to enhance with the gas reserves already discovered in the Black Sea. Moreover, additional substantial volumes will become available in 2026-2027. Romania will be able to contribute further to the energy security and resilience in Europe.

Thus, our engagement in promoting energy cooperation in the region is strong, both through capitalizing on available energy production potential and on cross border energy transport infrastructure. An important example in this respect is the agreement on a strategic partnership in the field of green energy development and transmission between the governments of Azerbaijan, Georgia, Romania and Hungary signed during the visit of President Aliyev to Bucharest on the 17th of December 2022. Through this agreement, we will develop the Black Sea green electricity submarine cable, providing valuable contributions to a stronger European energy security. This strategic partnership is also in line with the repower EU plan, which strengthened economic growth, security, resilience and climate action for Europe and for our partners.

Ladies and gentlemen, energy cooperation between the European Union and its member states on one hand, and Azerbaijan, on the other hand, has strategic priority and furthermore is required by the logic of the market. Let me reassure you of my country's solid and continuous commitment to regional cooperation as the way to find sustainable solutions to common challenges, in particular, for common energy security. Thank you very much.

Parviz Shahbazov: Thank you, Your Excellency, Mr. President, for your strong support for all our projects and for your valuable remarks. We really appreciate our growing energy cooperation with Romania.

Now, I would like to give the floor to the European Commissioner for Energy and co-chair of the Advisory Council, Miss Kadri Simson. You have the floor, Madame.

EU Commissioner for Energy Kadri Simson addressed the event.

Speech by Kadri Simson

- Dear President Aliyev.

Distinguished ministers, ladies and gentlemen.

I am very glad to be in Baku today. We have two very important occasions: the 9th Ministerial Meeting of the Advisory Council of the Southern Gas Corridor, and the inauguration of our new Advisory Council work stream on Green Energy.

Our discussion today takes place at the backdrop of global-level transformation of energy markets. Global growth is at risk. And energy security is at the top of our minds. Today's Advisory Council meetings are therefore an important opportunity to show that the EU, Azerbaijan and our partner countries stand united to work together on ensuring energy security and market stability.

We are also laying the foundations of long-term sustainable energy partnership. A partnership, which is centred on renewable energy and on increased interconnection of our energy systems. The EU and Azerbaijan are already enjoying a very successful cooperation. Our new Memorandum of Understanding on a Strategic Partnership in the Field of Energy cemented the role of the Southern Gas Corridor for both the EU and Azerbaijan, and our shared resolve to support its expansion. The numbers speak for themselves: deliveries of pipeline gas via the Southern Gas Corridor to the EU ramped up from 8.1 billion cubic metres in 2021 to 11.4 billion cubic metres in 2022. This increase played a key role in contributing to the diversification, security and stability of gas supply to the EU.

The results of the last binding market test for the Trans Adriatic Pipeline mark the start of doubling the current capacity. The increased cooperation between Azerbaijan and the EU on gas supplies is matched by the increase of our diplomatic engagement. There is mutual determination to turn this crisis into a driver of economic opportunity. We also need to look to where this partnership will take us in the future. Over the coming decades, gas will still play a role in the EU's energy transition. While we are ramping up LNG supplies, the Southern Gas Corridor will remain one of the few stable and competitive sources of pipeline gas delivered to the EU. This is also potentially an economic opportunity for others in the Caspian region to join forces with Azerbaijan to secure new markets for gas deliveries.

As you are all well aware, the EU is also working on limiting energy demand and ramping up renewables. Nevertheless, as we are moving away from our former main supplier of gas, the sheer volume of gas the EU needs to replace means that the demand for natural gas coming from trusted suppliers will continue to grow.

Our interest in renewables means that we want to extend the cooperation with our trusted partners beyond gas. The inauguration of the new Green Energy Advisory Council marks well the agreement among the partners today to move into this new direction. Shaping a sustainable energy future is about using a broad range of instruments and tools. The EU has a great experience in designing a market that can take up increased shares of renewables. Despite several difficult years behind us, our electricity grids have proven to be stable and resilient. We are happy to share our knowledge on this front. Of course, well interconnected markets with partner countries are a key ingredient of this process. The untapped potential for renewables here in Azerbaijan, particularly in offshore wind, is a well-known fact. Azerbaijan therefore has the potential to become the exporter of renewables and hydrogen to the EU. Our EU4Energy programme is already supporting Azerbaijan to boost the deployment and integration of renewable energy capacity. The EU is bringing our know-how, technology and private investments to the table.

Renewables are not the full story, as we know. Energy efficiency is also key to our efforts to strengthen security of supply and decarbonise. With the new Memorandum of Understanding, we look forward to continuing working together with Azerbaijan to advance the agenda on all these fronts.

Dear President Aliyev.

Ladies and gentlemen, ministers.

Shared economic prosperity and geopolitical stability go hand in hand. Citizens will benefit from our cooperation in energy. I can only conclude with an optimistic note on the future of the Southern Gas Corridor. Equally, I am looking forward to our energy cooperation to embrace renewable energy into our new Green Energy Advisory Council. I wish you all a very fruitful discussion today. Thank you.

Parviz Shahbazov: Dear Commissioner Simson, thank you for your valuable insights on the role of the Southern Gas Corridor, as well as strong support for our green agenda. This concludes our inaugural session.

Your Excellences Presidents, thank you very much for being with us today.

The event continued with plenary sessions on the “Southern Gas Corridor and Green Energy Ministerial Session”, the “Southern Gas Corridor: Expanding Affordable, Stable and Safe Natural Gas Supply” and the “Green Energy: Delivery of Caspian Sea Wind Energy to European Energy Markets”.