21. The Strategic Benefits of the Southern Gas Corridor
- Author:
- Vitaliy Baylarbayov
- Publication Date:
- 04-2021
- Content Type:
- Journal Article
- Journal:
- Baku Dialogues
- Institution:
- ADA University
- Abstract:
- At the end of 2020, the Southern Gas Corridor became fully operational. This marked the completion of a journey that began a decade ago when the government of Azerbaijan and the State Oil Company of the Azerbaijan Republic (SOCAR) took a strategic decision to launch a major natural gas export project. The Southern Gas Corridor is one of the largest and the most expensive gas supply projects in the world built to date. In December 2013, SOCAR and its partners signed a Final Investment Decision (FID) to establish a gas pipeline corridor from Azerbaijan through Georgia, Turkey, Greece, and Albania before ending in Italy. A branch pipeline is now under construction to Bulgaria, which is expected to be completed in the second half of 2021. In July 2018, the project supplied its first gas to the Turkish market and went on to change the dynamics of that country’s gas market, whereby Azerbaijan is now one of its top gas suppliers. On December 31st, 2020, inaugural commercial gas supplies arrived from the Caspian into Europe, signaling the commencement of the Southern Gas Corridor’s full operations. For Azerbaijan, the Southern Gas Corridor provides a major source of revenue unlinked to the global oil market; the project also strengthens Baku’s links with its neighbors and Europe. For SOCAR—as operator of components of the project and investor in all its segments—the project’s success represents a major step in the company’s transition from a national to an international energy company. The Southern Gas Corridor provides new gas supplies to Turkey, Georgia, and Europe and is a platform for increased supplies to these markets and also can be extended to reach additional markets in Europe. With the completion of the first stage of the Southern Gas Corridor, Azerbaijan and SOCAR, together with their partners, are examining strategies for the next phase of the corridor’s development.
- Topic:
- Energy Policy, International Trade and Finance, Natural Resources, and Gas
- Political Geography:
- Europe, Asia, and Azerbaijan