Azerbaijan's share in global natural gas production and exports revealed

Azerbaijan's share in global natural gas production increased in the 2000s and has remained stable for a long time at about 0.6%, similar to Kazakhstan's, Report informs with reference to the World Bank.

The increase in natural gas production was accompanied by an increase in exports from $0.4 billion (2010) to $2.4 billion (2019), and its share in the country's total exports increased from 1.4% to 12%. Globally, Azerbaijan accounts for approximately 0.8% of all gas exports and 2.4% of gas traded through pipelines.

The World Bank reports that Azerbaijan currently exports all of its natural gas via pipelines, and as a result, its exports are geographically highly concentrated. In 2019, 78% of natural gas was exported to Turkiye and 21% to Georgia.

However, these geographical directions are expected to change due to the construction of new pipelines. In December 2020, Azerbaijan exported natural gas to Italy for the first time thanks to the existing Trans-Anatolian Pipeline (TANAP) and the new Trans-Adriatic Pipeline (TAP), which connects Azerbaijan to Italy via Georgia, Turkey and Greece.

In 2021, Azerbaijan exported 8.2 billion cubic meters of gas to Europe, and in 2022 this volume will be 12 billion cubic meters. Azerbaijan will export 24 billion cubic meters of gas in 2022 (22 billion cubic meters in 2021).

In 2021, Azerbaijan exported 6.8 billion cubic meters of gas to Italy. In 2022, Azerbaijani gas exports to the Italian market are expected to be about 10 billion cubic meters.

In 2019, Azerbaijan exported approximately 12 billion cubic meters of natural gas worldwide. Italy is a huge market for natural gas, accounting for about 5% of global imports. Currently, Italy's natural gas imports are mainly provided by Russia (39%), Algeria (29%) and Qatar (8%).

The World Bank reports that the importance of natural gas in Azerbaijan is increasing.

In the last twenty years, production has increased almost five times, from 5 billion cubic meters in 2000 to 24 billion cubic meters in 2019. In the last decade, the growth rate has weakened compared to the previous decade. However, production showed a sharp increase of 28% in 2019.

Azerbaijan currently consumes about half of the natural gas it produces primarily for electricity production, a minor part for heating, and the rest is exported. This level of exports is relatively low compared to other major natural gas producers. However, reducing domestic consumption may increase the amount of natural gas available for export. Reducing domestic consumption is possible either through policies such as increasing energy efficiency or replacing natural gas with renewable sources of electricity generation. The ratio of extraction to reserves in Azerbaijan is also high, which indicates that there are opportunities for increasing production.

Azerbaijan produced 38.4 billion cubic meters of natural gas in January-October 2022, 7.3% or 2.6 billion cubic meters more year-on-year.