Last update: May 25, 2024 21:17

Newsroom logo

Serbia Joins European Buyers of Azerbaijani Gas

By Gunay Hajiyeva December 11, 2023

None

Presidents of Azerbaijan, Bulgaria, and Serbia inaugurate the Serbia-Bulgaria Gas Interconnector, Niš, Serbia, December 10, 2023 / President.Az

Serbia joined the countries purchasing natural gas from Azerbaijan after the Serbia-Bulgaria Gas Interconnector was launched in the Serbian city of Niš on Sunday.

President Ilham Aliyev said the launch of the interconnector contributes to expanding the geography of Azerbaijan’s gas exports in Europe.

“We currently export our natural gas to eight countries, and Serbia is the ninth country. Seven of these nine countries are European, and, of course, today's ceremony, the launch of the interconnector will make an important contribution to European energy security,” President Aliyev said in his speech at the inauguration of the Serbia-Bulgaria Gas Interconnector.

According to him, European buyers will get twice as much natural gas from Azerbaijan, based on the memorandum of understanding signed in 2022. In 2021, Azerbaijani gas supplies to Europe surpassed 8 billion cubic meters and will reach 12 billion cubic meters in 2023 accounting for 50 percent of Azerbaijan's total gas exports.

Serbia is expected to receive the first batch of Caspian gas via Bulgaria in early 2024. Bulgaria has been importing gas from Azerbaijan since 2021 when 270 million cubic meters of gas were supplied. Last year, the volume of deliveries exceeded 500 million cubic meters and this year, it will be around 1 billion cubic meters.

The Serbia-Bulgaria Gas Interconnector connects the Serbian city of Niš and the town of Novi Iskar near Bulgaria’s capital Sofia, allowing Belgrade to access gas from Azerbaijan and LNG terminal in the Greek port of Alexandroupolis. The project’s €85.5 million total cost has been co-financed by the Serbian government, and the European Union (EU) and the European Investment Bank (EIB) in €49.5 million EU grant and €25 million EIB loan.

The projected capacity of the new pipeline allows supplies of 1.8 billion cubic meters of natural gas annually, providing an additional 80% capacity increase relative to Serbia’s current annual gas needs that stand at nearly 2.4 billion cubic meters per year. The gas from Azerbaijan will bring cleaner and cheaper energy for the citizens and economy of Serbia.

The Serbia-Bulgaria gas interconnector has been identified in the EU's Economic and Investment Plan for the Western Balkans as one of the flagship projects, fostering the transition from coal to more sustainable and green energy production.

"With this interconnector, we are securing alternative gas supplies, apart from the Russian gas," Reuters quotes Serbian Energy Minister, Dubravka Djedovic Handanovic, as saying.

Head of the EU Delegation to Serbia Emanuele Giaufret said the commissioning of the gas pipeline represents an important milestone in strengthening Serbia’s energy security by diversifying the energy supply. According to him, the project will end Serbia’s dependence on Russian gas.

Serbia is currently satisfying the domestic need for natural gas with imports from Russia via the Balkan Stream gas pipeline traversing the Black Sea, Türkiye, and Bulgaria. Serbia has already signed a commercial contract with Azerbaijan, for the delivery of 400 million cubic meters of natural gas per year from 2024.

Since December 31, 2020, Azerbaijan has been supplying natural gas to Europe via the Trans Adriatic Pipeline (TAP), which forms the final segment of the Southern Gas Corridor (SGC). TAP starts at the Turkish-Greek border and runs along 773-kilometer onshore and 105-kilometer offshore routes traversing Greece and Albania toward its final destination in Italy.

The three-segmented SGC spans seven countries and six regulatory systems, linking 11 different investors and supplying 12 different gas buyers, primarily in Europe. The pipeline’s initial 16 billion cubic meters annual transportation volume is shared between Türkiye and Europe, which receive 6 billion cubic meters and 10 billion cubic meters, respectively. The main source of natural gas for the SGC is Azerbaijan’s offshore Shah Deniz field, with an estimated 1.2 trillion cubic meters of proven reserves.

Currently, the European market accounts for the largest share of daily gas exports from Azerbaijan. European consumers are supplied about 27 million cubic meters of Azerbaijani gas per day. By 2027, the total volume of gas deliveries is forecast to reach 20 billion cubic meters annually. President Aliyev said Azerbaijan's proven gas reserves of 2.6 trillion cubic meters make it possible to send more blue fuel to European consumers.