European Commission President von der Leyen traveled to Baku, the capital of Azerbaijan, on the 18th to seek to further strengthen bilateral relations, including energy cooperation. At a time when Relations between Russia and Europe are strained by the Russian-Ukrainian conflict, the EU is seeking to reduce its dependence on Russian energy and diversify its energy supply. However, given the sudden turn in EU energy policy, Azerbaijan may struggle to fill the gap, at least in the short term.
"Finding gas" everywhere
According to the European Commission, von der Leyen and European Commissioner for Energy Affairs Kadry Simsson arrived in Baku on the 18th and will hold talks with Azerbaijani President Aliyev. Simsson will also hold an EU-Azerbaijani energy dialogue with Azerbaijani Energy Minister Shakhbazov.
Strengthening bilateral energy cooperation is the highlight of Von der Leyen's trip, and the EU and Azerbaijan also have a basis for cooperation. According to a draft bilateral cooperation agreement disclosed by Reuters, the EU wants Azerbaijan to increase the flow of natural gas from the "Southern Gas Corridor" pipeline.
"The two sides hope to support bilateral gas trade, including exports to the EU through the Southern Gas Corridor, to reach at least 20 billion cubic meters of natural gas per year by 2027, depending on commercial feasibility and market demand."
The "Southern Natural Gas Corridor" is an important energy cooperation project vigorously promoted by the EU and Azerbaijan, Turkey and other countries in recent years, aiming to import natural gas from the Shaadnitz oil field in the Caspian Sea of Azerbaijan into Europe through Georgia, Turkey and other countries, so as to diversify the energy supply channels in Europe.
Construction of the Southern Gas Corridor project began in 2014, with Azerbaijan sending about 8 billion cubic meters of gas to Suppliers in Europe via the Trans-Adriatic Pipeline from the end of 2020. The EU believes that this corridor plays an important role in its gas supply, especially in South-Eastern Europe.
In addition, the EU and Azerbaijan are seeking to promote cooperation in clean energy and improving energy efficiency. The two sides are also negotiating a new comprehensive agreement covering areas such as economic diversification, investment and trade. The agreement is expected to set the agenda for the future development of bilateral relations.
Worry about "out of breath"
Announcing von der Leyen's trip, the European Commission said Russia was "weaponizing" its energy supply and that "diversifying energy imports is a priority for the EU." ”
However, Mikhail Ulyanov, Permanent Representative of Russia to International Organizations in Vienna, said on the 17th: "Russia fully complies with its contractual obligations and has never refused to continue to supply natural gas to Europe." ”
Previously, Russia had been a major supplier of gas to the European Union. But since the outbreak of the Ukraine crisis, the European Union has imposed multiple rounds of sanctions on Russia, and it is also urgent to get rid of dependence on Russia's energy supply.
As a countermeasure, Russia has now reduced or stopped supplying gas to 12 EU member states, and Its gas exports to the EU are only half of what they were a year ago.
As the Conflict between Russia and Ukraine continues, developments have increased the pressure of the EU to "find gas". Last week, Nord Stream-1, a major Russian pipeline for gas to Germany, was temporarily cut off due to routine maintenance. European countries are worried that russia will extend the maintenance period, or even completely cut off this important "trachea", Europe may face more energy supply shortages and high prices.
In this context, some European countries have begun to "find gas" and set their sights on Azerbaijan and other countries. For example, 40% of Italy's gas supply relies on Russia, which has finalized gas purchase contracts with Azerbaijan, Qatar, Algeria and other countries to purchase two sets of LNG storage and regasification units.
More than 90 percent of Bulgaria's gas demand depends on supplies from Russia, which has agreed to buy LNG from the United States while stepping up talks with Azerbaijan to increase gas supply.
Gaps are hard to close
In order to achieve "open source", the EU is also vigorously looking for alternative suppliers of energy. But for now, Azerbaijan may find it difficult to fill the gap, at least in the short term.
First of all, if the two sides sign a cooperation agreement at that time, Azerbaijan is expected to increase its domestic natural gas production, and the two sides may also take measures such as expanding pipelines, but face costs, construction periods and other issues.
Azerbaijani Economy Minister Mikkar Jabarov said in May that increased production and exports would not be realized anytime soon due to the lack of international investment in the country's energy projects in recent years.
The EU side is equally ill-prepared. It is worth noting that the construction of LNG receiving terminals in Europe is generally insufficient, and the processing capacity for additional imports is limited. For example, Germany has just started to build the first LNG receiving station, and is preparing to build two in two years, which is obviously difficult to solve the urgent need.
Second, while meeting the country's growing demand for natural gas, even if Azerbaijan can raise its gas transmission volume to 20 billion cubic meters per year, it will be difficult to fill the gap facing the EU. According to the International Energy Agency, the EU will import as much as 155 billion cubic meters of natural gas from Russia in 2021, accounting for about 45% of the EU's total natural gas imports and 40% of total consumption.
Moreover, long-term gas purchase agreements with other countries may also adversely affect the EU's achievement of its climate change goals. A plan released by the European Commission late last year showed that to meet the goal of combating climate change and reducing dependence on imported energy, the EU wants to phase out natural gas and increase the use of "low-carbon gases", such as biomethane and hydrogen.
The European Union reportedly proposed at the time to prohibit member states from signing gas procurement contracts that extend beyond 2049 in order to achieve "carbon neutrality" by 2050. Now, the draft EU-Azerbaijan cooperation agreement states that despite the EU's ambitions to combat climate change, "natural gas will continue to be used in the EU."
In addition, it remains to be seen whether potential regional conflicts could jeopardize energy supplies. In the autumn of 2020, Armenia and Azerbaijan broke out in a new round of conflict in the Nagorno-Karabakh region.
The Bruegel Institute, a European think tank, said earlier this year that the EU's most effective solution to dealing with energy shortages is to adjust demand, rather than just looking for alternatives to Russian gas from other countries.
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Column Editor-in-Chief: Yang Liqun Text Editor: Yang Liqun Caption Source: Visual China Photo Editor: Xu Jiamin
题图说明：德国韦尔讷，欧洲最大的天然气传输系统运营商之一的Open Grid Europe (OGE)的管道和压力表。 Source: Author: Lu Yifei