Serbia became a member of the group of nations procuring natural gas from Azerbaijan subsequent to the inauguration of the Serbia-Bulgaria Gas Interconnector in Niš, Serbia, on Sunday.
According to President Ilham Aliyev, the implementation of the interconnector project will enhance the geographical scope of Azerbaijan’s gas exports in the European market.
Based on the memorandum of understanding that was signed in 2022, it is projected that European purchasers will receive twice the amount of natural gas from Azerbaijan. In the year 2021, the total quantity of Azerbaijani gas supplied to Europe exceeded 8 billion cubic meters, and this figure is anticipated to increase to 12 billion cubic meters by 2023, constituting 50 percent of Azerbaijan’s overall gas exports.
Serbia is anticipated to acquire its initial shipment of Caspian gas through Bulgaria in the early stages of 2024. Bulgaria commenced importing gas from Azerbaijan in 2021, with an initial supply of 270 million cubic meters. Subsequently, gas deliveries exceeded 500 million cubic meters last year, and are projected to reach approximately 1 billion cubic meters this year.
The Serbia-Bulgaria Gas Interconnector links the urban center of Niš in Serbia with the town of Novi Iskar near Sofia, the capital of Bulgaria. This infrastructure enables Belgrade to obtain natural gas from both Azerbaijan and the LNG terminal situated in the Greek port of Alexandroupolis. The entire project, which amounts to €85.5 million in total expenses, has been partially funded by the Serbian government, the European Union (EU), and the European Investment Bank (EIB). Specifically, the EU has provided a grant of €49.5 million, while the EIB has granted a loan of €25 million.
The anticipated capacity of the newly constructed pipeline will enable the provision of 1.8 billion cubic meters of natural gas on an annual basis. This represents a noteworthy 80% augmentation in capacity compared to Serbia’s existing annual gas requirements, which currently amount to approximately 2.4 billion cubic meters per year. The introduction of gas from Azerbaijan will contribute to the delivery of more environmentally friendly and cost-effective energy for the people and economy of Serbia.
The Serbia-Bulgaria gas interconnector has been designated as one of the key initiatives in the EU’s Economic and Investment Plan for the Western Balkans, with the aim of facilitating the shift from coal-based energy generation to a more environmentally friendly and sustainable approach.
The commencement of the gas pipeline is deemed a significant milestone in enhancing Serbia’s energy security through the diversification of its energy supply, as stated by Emanuele Giaufret, the Head of the EU Delegation to Serbia. Giaufret asserts that this project will effectively eradicate Serbia’s reliance on Russian gas.
At present, Serbia is meeting its domestic demand for natural gas by relying on imports from Russia through the Balkan Stream gas pipeline, which passes through the Black Sea, Türkiye, and Bulgaria. Additionally, Serbia has entered into a business agreement with Azerbaijan to receive an annual supply of 400 million cubic meters of natural gas starting from 2024.
Azerbaijan has been delivering natural gas to Europe through the Trans Adriatic Pipeline (TAP) since December 31, 2020. The TAP, which constitutes the last phase of the Southern Gas Corridor (SGC), commences at the border between Turkey and Greece and spans 773 kilometers on land and 105 kilometers offshore, passing through Greece and Albania before reaching its ultimate endpoint in Italy.
The SGC, which consists of three segments, traverses seven countries and operates under six regulatory systems. It connects 11 distinct investors and serves 12 gas buyers, primarily located in Europe. Initially, the pipeline transports 16 billion cubic meters of gas annually, with Türkiye and Europe receiving 6 billion cubic meters and 10 billion cubic meters, respectively. The primary source of gas for the SGC is the Shah Deniz field, situated offshore Azerbaijan, boasting proven reserves of approximately 1.2 trillion cubic meters.
At present, the European market holds the majority portion of Azerbaijan’s daily gas exports. Approximately 27 million cubic meters of Azerbaijani gas are supplied to European consumers on a daily basis. Projections indicate that by 2027, the overall quantity of gas deliveries is expected to reach an annual volume of 20 billion cubic meters. President Aliyev has highlighted that Azerbaijan’s confirmed gas reserves of 2.6 trillion cubic meters provide the potential to increase the supply of natural gas to European consumers.
