EU, Azerbaijan plan gas deal in pivot away from Russia

BRUSSELS, July 14 (Reuters) – The European Fee has proposed to EU international locations a take care of Azerbaijan to extend imports of pure gasoline and assist the enlargement of a pipeline to do that, in line with a draft doc seen by Reuters.

The draft memorandum of understanding, which wants approval from the governments concerned and will nonetheless change, is a part of European Union efforts to slash reliance on Russian gasoline following the conflict in Ukraine.

“The Sides aspire to assist bilateral commerce of pure gasoline, together with by means of exports to the European Union, by way of the Southern Fuel Hall, of a minimum of 20 billion cubic metres of gasoline yearly by 2027, in accordance with industrial viability and market demand,” mentioned the doc, dated July 11.

The Fee declined to remark. EU power commissioner Kadri Simson is scheduled to go to Azerbaijan later this month.

The Trans-Adriatic pipeline, the ultimate leg of the Southern Fuel Hall pipeline community, final yr introduced greater than 8 bcm of Azeri gasoline into European international locations comparable to Italy.

The draft says each side will encourage financing the enlargement of that community to extend deliveries to Europe, including that such investments ought to have the ability to carry low-carbon gases in future to keep away from locking in years of planet-warming emissions.

An uptick in deliveries would additionally require Azerbaijan to broaden its home gasoline manufacturing.

The draft highlighted the significance of “long-term, predictable and steady contracts” to supply safety to gasoline producers. But it surely additionally mentioned future gasoline contracts would want to align with the EU’s local weather change targets, which in line with Brussels would require gasoline use to plummet, significantly after 2030.

Either side ought to enhance motion to curb emissions of methane, a potent greenhouse gasoline, of their provide chains, together with by means of incentives to gather gasoline that will in any other case leach into the ambiance, it mentioned.

Concern over additional cuts to Russian gasoline provide sharpened this week as scheduled upkeep started on the Nord Stream 1 pipeline bringing gasoline to Germany. Governments and firms have warned Moscow could lengthen the outage.

The draft settlement mentioned the EU and Azerbaijan would additionally look at the event of electrical energy interconnections and talk about future hydrogen commerce.

Reporting by Francesco Guarascio, Kate Abnett; Enhancing by Kirsten Donovan

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