Bloomberg | Bloomberg | Getty Images LONDON — The EU signed a new gas deal with Azerbaijan on Monday as officials scramble to secure future supplies amid growing fears of a Russian disruption. European officials are bracing for a possible complete cut-off in natural gas supplies from Russia following Moscow’s invasion of Ukraine. Russia was for several years Europe’s most important source of natural gas, but now there is a steady push from Brussels to reverse that. European Commission President Ursula von der Leyen and Europe’s energy chief Kadri Simson were in Azerbaijan on Monday to finalize the deal. In a statement, the Commission said that Azerbaijan has committed to deliver at least 20 billion cubic meters to the EU annually by 2027. Azerbaijan was already on track to increase its deliveries to the region. According to the Commission, the country’s natural gas supply will increase from 8.1 billion cubic meters in 2021 to an expected 12 billion cubic meters this year. “Amid Russia’s continued build-up of its energy reserves, diversifying our energy imports is a top priority for the EU,” the European Commission said in a statement Friday before the trip. Russia has denied using natural gas as a weapon against the West, but supplies have fallen by more than 60% in recent weeks. Additionally, the shutdown of the Nord Stream 1 pipeline – a critical transit point for Russian gas to Germany and beyond – for maintenance work has added to concerns that Moscow could potentially cut off gas supplies to the bloc altogether. Azerbaijan, which borders Georgia, Turkey, Armenia, Russia, Iran and the Caspian Sea, began exporting natural gas to Europe through the Trans Adriatic Pipeline in late 2020. At the time, Azerbaijan said that it planned to send 10 billion cubic meters of natural gas to Europe each year, mainly to Italy, but also to Greece and Bulgaria. The International Energy Agency noted in March that Azerbaijan could play a role as Europe tries to reduce gas imports from Russia. “Our analysis shows that production within the EU and imports from non-Russian pipelines, including from Azerbaijan and Norway, could increase next year by as much as 10 billion cubic meters from 2021,” the IEA said. Some analysts, however, question Azerbaijan’s reliability as a supplier. “It should be noted that Azerbaijan’s natural gas route to Europe passes through Russia’s sphere of influence,” Gubad Ibadoghlu, a senior visiting fellow at the London School of Economics, said in a blog post in May. But Europe is in a race against time to reduce its dependence on Russia. In total, 12 EU countries have been directly affected by Russia’s reduced gas exports so far, and some others no longer receive gas from Moscow. “Further decisions by Russia to arbitrarily cut off countries or companies cannot be ruled out. From the beginning of Russia’s invasion of Ukraine, we have known that a very serious upheaval is possible and now it seems likely,” the European Commission’s Simson said in a news release. conference at the end of June. On Monday, Reuters reported that a letter from Gazprom, the Russian energy giant, said it could not meet all supply obligations due to “extraordinary” circumstances.
Time to save energy
Europe’s efforts to find alternatives to Russian hydrocarbons come with an additional caveat: it’s time to save energy. The European Commission, the EU’s executive arm, is expected to present on Wednesday a handful of recommendations for companies on how to reduce energy use. The plan aims to raise awareness of the region’s harsh winter if natural gas supplies are cut. “We will soon develop a plan where we will update our work on potential scenarios, look at ways to save energy proactively and provide guidance to reduce demand on the industry,” Simson said last week on Twitter.
