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7 Pages

Azerbaijan's tightening gas balance


Azerbaijan's tightening gas balance

Report summary

Azerbaijan’s flagship US$40 billion Southern Gas Corridor development is on schedule and on budget for first gas by end-2018. It will fulfil the country’s strategic ambition of delivering Shah Deniz Phase Two gas beyond Turkey and into Europe. However, it will be dedicated to export markets, with no domestic sales.

This comes at a time when a supply shortfall is expected in Azerbaijan. The country has been a net gas exporter since 2007, mainly to Turkey, but has recently discussed Russian imports for the first time in a decade.

Domestic demand pressures do not threaten the outlook for Shah Deniz Phase Two. But, supply from pre-FID offshore developments is needed to avoid a longer-term shortfall. 

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  • Azerbaijan's tightening gas balance PDF - 528.97 KB 7 Pages, 0 Tables, 7 Figures

Description

This Upstream Oil and Gas Insight report highlights the key issues surrounding this topic, and draws out the key implications for those involved.

This report helps participants, suppliers and advisors understand trends, risks and issues within the upstream oil and gas industry. It gives you an expert point of view to support informed decision making.

Wood Mackenzie's 500 dedicated analysts are located in the markets they cover. They produce forward-looking analysis at both country and asset level across the globe, backed by our robust proprietary database of trusted research.

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  • Executive summary
  • Azerbaijan’s domestic gas market is increasingly tight
  • Oil recovery will be prioritised over gas sales
  • Export-focused Shah Deniz Phase Two is on schedule
  • Limited near-term supply available for expanding domestic market
  • Domestic market must be incentivised for pre-FID projects
  • Near-term gas imports will be substituted by new sources of supply in 2020s

In this report there are 7 tables or charts, including:

  • Executive summary
  • Azerbaijan’s domestic gas market is increasingly tight
    • 2015-16: Azerbaijan – key gas sector developments
    • 2015 energy demand by fuel
    • Gas demand by sector (2010-30)
  • Oil recovery will be prioritised over gas sales
  • Export-focused Shah Deniz Phase Two is on schedule
  • Limited near-term supply available for expanding domestic market
    • Gas supply-demand balance (2015-30), excluding pre-FID projects
    • Potential post-2020 supply shortfall
    • New post-2020 sources of supply
  • Domestic market must be incentivised for pre-FID projects
    • Absheron: comparison of delivered costs (US$/mmbtu)
  • Near-term gas imports will be substituted by new sources of supply in 2020s
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