Baku, April 4, AZERTAC

On April 4, the 11th Southern Gas Corridor Advisory Council Ministerial Meeting and the 3rd Green Energy Advisory Council Ministerial Meeting were held at the Gulustan Palace in Baku.

President of the Republic of Azerbaijan Ilham Aliyev attended the event.

Parviz Shahbazov, Azerbaijan’s Minister of Energy, said:

- Your Excellency, President of the Republic of Azerbaijan, Mr. Ilham Aliyev, dear Commissioner for Energy and Housing, Mr. Dan Jørgensen, distinguished ministers, dear guests, ladies and gentlemen.

It's my great honor to welcome you to the 11th Ministerial meeting of the Southern Gas Corridor Advisory Council and the 3rd ministerial meeting of the Green Energy Advisory Council. This gathering marks yet another significant milestone in our successful efforts to strengthen the synergy between energy security and energy transition within this framework. I would like to extend my deepest gratitude to His Excellency, President of the Republic of Azerbaijan, Mr. Ilham Aliyev, for his steadfast leadership and unwavering support in driving this success. It's now my distinct privilege to invite His Excellency, President Ilham Aliyev, to deliver the keynote address.

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The President of Azerbaijan addressed the event.

Speech by President Ilham Aliyev

- Good morning, ladies and gentlemen, dear guests.

I welcome you all to Azerbaijan. A special welcome to our guest from Brussels. Mr. Commissioner, welcome. This is the first time you are participating in this event. But as we all know, and as I already said, it is the eleventh time that the Southern Gas Corridor Advisory Council has gathered in Baku. Initiated by Azerbaijan and supported by the European Commission, this important gathering has played a crucial role in elaborating approaches to energy security, addressing the issues of energy security, and coordinating our joint efforts. And today, while we had a family photo procedure, I said that we will probably need more space for that because the team is growing. And this is a very good sign of our cooperation. The more time passes, the more countries and companies are involved in the process, united with a common goal. First, to strengthen cooperation, because without cooperation none of the energy security projects would be possible.

And second, to provide energy security for themselves, their neighbors, and their partners. I think the very positive spirit of partnership and cooperation that unites us is a clear demonstration of our responsibility — the responsibility of producers, transitors, and consumers. Of course, the balance of interests between the three major actors of this process, with the support of international financial institutions, made our story — or stories — success stories. Countries, their governments, investors, companies, and leading international financial institutions — this is our team, and the team is growing. It is clear today, more than ever before, that energy security is an integral part of the national security of countries. I would also say that today we can also talk about industrial security, because in order to develop industries, we need energy resources, we need petrochemicals, we need fertilizers. And Azerbaijan is a producer and exporter of crude oil, natural gas, oil products, petrochemicals, and fertilizers.

And our energy company, SOCAR, is involved in upstream, downstream, and midstream activities in Azerbaijan and outside our boundaries. Azerbaijan, for many years, was and will be a reliable partner. And as high representatives of the European Commission noted, Azerbaijan is a reliable partner in the field of energy and a pan-European gas supplier. This is true. The geography of our gas supply is growing. Since our last meeting here in Baku, at the 10th Advisory Council, five more countries have become recipients of our natural gas. Today, Azerbaijan supplies natural gas to 12 countries — 10 of them are European, and eight of those are members of the European Union. The geography of our gas supply in Europe will definitely grow, because today we are already involved in the creation of gas distribution networks in some European countries. Some of them do not have one, some of them need to expand it, and Azerbaijan, as an investor, is planning to do that. So, the geography of our gas supplies will definitely grow through different ways, including interconnectors.

Of course, we need to think about joint efforts in the expansion of the existing gas pipeline system. The Southern Gas Corridor is a tremendous success story for all of us. The 3,500-kilometer integrated pipeline system today is the main artery for energy security for many countries. And now it is working at full capacity. Whether it’s the South Caucasus Pipeline, TANAP, or TAP — three integral parts of the Southern Gas Corridor — all are fully packed. So we need to expand. And for that, we will need, of course, financing. And we come to a very important point, which we have raised on several occasions — that international financial institutions, those who decided to stop financing fossil fuel projects, will probably reconsider their policy, especially taking into account the huge geopolitical changes that we all witness. Because without that, any further investments in transportation infrastructure and even in upstream will be very problematic.

We have great experience in combining corporate financing and borrowed money, which made it possible to implement huge projects of production and transportation. ACG, Shahdeniz, Absheron — these are oil and gas fields which today provide energy security for many countries. And many more oil and gas fields will be operational within several years. So, contracts have been signed. The working program has been approved. Construction of pipelines — also the Baku-Tbilisi-Ceyhan and Baku-Supsa oil pipelines, as well as the Southern Gas Corridor — all that was done in cooperation, as I said, by all the actors. So, when the policy to stop financing fossil fuel projects is introduced, it sends a signal to investors, to companies, to countries, which is not positive. So, I think this is an important moment, which will probably be discussed.

We hope that, despite a very ambitious green agenda in Europe, fossil fuel producers — and fossil fuel as an important factor of energy security — will not be forgotten and will not be discriminated. Actually, that was our message at COP29 when Azerbaijan hosted this global international event — that there should be no discrimination, there should be no dividing lines between countries rich in fossil fuels and those who don’t have them. On the contrary, countries rich in fossil fuels that invest in renewables must be praised, not attacked.

So, I think that if this important issue is addressed, it will make the lives of producers easier. At the same time, the long-term contracts process is also important. Because we all know that energy projects — oil and gas — need a lot of investments, and you recover investments over many years. By the way, until today, what we invested in the Southern Gas Corridor as a country has still not been recovered. We still have not reached the zero balance. Therefore, we must be sure that our gas will be needed in Europe, which is our main market, for many more years. If we don’t have this guarantee, investors will not invest, and the country will not invest. So there will be a big shortage of natural gas. Our reserves are known.

We expect new production from new fields this year — primarily from the Azeri-Chirag-Gunashli Deep Gas Structure. And also, we are, I think, in the final stage of reaching an agreement about the expansion of production from the Absheron Field, moving to Phase 2, which will add a minimum of 3 BCM to the existing 1.5.

So, all of this is possible, but it requires, as I said, these two important factors — physical transportation infrastructure through interconnectors and through expansion of the Southern Gas Corridor, and reliable forecasts and reliable partnership. Because in a partnership, all sides must be reliable.

With respect to our green agenda, as I said, we managed to combine these two important factors, satisfying the needs of our consumers.

By the way, since Azerbaijan and the European Commission signed a declaration on strategic partnership in the field of energy, our gas supply to Europe has increased by almost 60%. That declaration was signed by the President of the European Commission and myself in mid-2022. In 2021, our gas supply to Europe was about 8 BCM. Last year, it was almost 13. So, it is more than half of our total export, which is 25 BCM, and which will grow. So, it is a substantial amount already today. Taking into account our plans to engage new fields and also to increase production from existing gas fields, we will definitely have much more gas for our consumers. If we add our green agenda, which will save us a lot of natural gas, we can imagine that Azerbaijan will play an even more important role for our partners with respect to energy security.

Today, already signed contracts with our investors on Solar and Wind Power stations will allow us to have, by 2030, 6 GW of solar and wind energy. As I said, that will save a lot of natural gas, which we currently use to produce electricity domestically, and all of that will be available for export. We are actively developing this ourselves with our own investments. Regarding hydropower potential today in the territories liberated from Armenian occupation — East Zangezur and Karabakh — we have already installed 270 megawatts of hydropower stations. More than 30 small hydropower stations have already been inaugurated, and in the next maximum five years, this number will grow up to 500 megawatts, with an additional 30 small hydropower stations. So, that will eventually, by 2030, create an energy potential of 6.5 gigawatts. And just for your information, today Azerbaijan’s installed capacity is slightly more than eight. So, we will almost double our potential to produce energy from renewables within the next five years.

Of course, today I'm sure that at the session of the Green Energy Advisory Council, the green cable from Azerbaijan to Europe will also be discussed. As far as I was informed, the feasibility study of that project is in the final stage. So, after it is fully completed, the practical negotiations will definitely start again with respect to financing. Of course, we can anticipate that there will be no restrictions on financing the green energy project. But I think it will be important to upgrade these projects within European institutions to projects of common interest — because that is what they are.

So, I will probably conclude now by once again expressing deep satisfaction with the results we have achieved through the active format of our cooperation. Yes, we gather once a year in Baku, but throughout the year there are numerous events, meetings, conferences, and bilateral and multilateral partnership formats, which actually create the synergy. And, as always at the Advisory Council, we review what has been done during the last year and plan our future steps. I wish both councils success.

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Parviz Shahbazov: Mr. President, we are extremely grateful for your invaluable remarks. The Advisory Council, established through your visionary initiative, has evolved into a vital platform for enhancing energy security both regionally and globally. Your consistent guidance on diversification, encompassing both routes and sources, has now, as you mentioned, branched out into the green energy initiatives, enhancing the Council's role as the cornerstone of our remarkable collaboration. We deeply appreciate your continued support and extend our heartfelt thanks.

With the permission, I now turn to EU Commissioner for Energy and Housing, Mr. Dan Jørgensen, who begins his tenure as a co-chair of the Advisory Council at a pivotal time. We look forward to working closely together and wish him success in this important mission.

Mr. Jørgensen, the floor is yours.

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Speech by Commissioner Dan Jørgensen

- Thank you so much and let me start, Mr. President, by thanking you for your leadership, not only in today's Councils but also for your personal commitment to the very close friendship and partnership with the European Union. This is highly appreciated, and I want to thank you so much for that.

Excellencies, ladies and gentlemen, I am delighted to be here today, and I want to thank you all for participating. I want to convey a special thanks to Minister Shahbazov for your good cooperation with the EU Commission over the last years.

Now, three years ago, Russia's brutal and illegal invasion of Ukraine and its weaponization of energy upended the fundamentals of our energy market, causing a tremendous shift in Europe's energy system. In these challenging times, Azerbaijan reinforced its role as a trusted energy partner for the EU. Gas started flowing from Azerbaijan to Europe through the Southern Gas Corridor in 2020.

And as you know, President von der Leyen came here two years ago to sign a strategic partnership in the field of energy with you, Mr. President. Our partnership with Azerbaijan and our cooperation on the Southern Gas Corridor were essential in our efforts to diversify our gas supply and to reduce our resilience on Russian gas. In the coming years, we expect pipeline gas from Azerbaijan to play an important role in the EU energy system during our transition to net zero.

In this sense, we welcome efforts to expand trading capacity. The Southern Gas Corridor Advisory Council is an important part of such efforts to oversee the operation of the corridor, tackle methane emissions from the oil and gas sector, and promote energy efficiency, renewable deployment, and electricity grid development. But our work is not just about meeting the challenges of today.

It is about charting a path towards our future. And that is why we are working to establish a green energy corridor between the South Caucasus and the European Union. There are various concrete ideas using different technologies and different routes.

It remains to be seen how the most promising ideas could combine and develop into a proper green energy corridor. There is enormous potential for a good spirit of cooperation and high interests from all sides. As stated by President von der Leyen, we encourage an inclusive approach to ensure that the entire region benefits from this project.

This will be an important topic today at our third Green Energy Advisory Council. It will also be an opportunity to discuss progress in the initiatives championed by Azerbaijan during its COP Presidency last year. In particular, I refer to the Global Energy Storage and Grids Pledge, with targets of achieving 1,500 gigawatts in energy storage capacity and 25 million kilometres of grid infrastructure by 2030. These initiatives bolster our global pledge to triple renewable energy capacity and double energy efficiency gains worldwide by 2030. And they provide inspiration as we prepare new and ambitious “nationally determined contributions” ahead of COP30 in Brazil.

Let me also highlight the Global Methane Pledge, which Azerbaijan joined last year, thereby becoming one of 160 countries committed to cutting global methane emissions by 30% by 2030. I appreciate that Azerbaijan has contributed to further elevate this issue at COP29. Implementation will be key, but Azerbaijan has become a global example of the positive effects of methane emission abatement, particularly in the energy sector. Similarly, with SOCAR having joined the Oil and Gas Methane Partnership 2.0, Azerbaijan is well on track to significantly abate its methane emissions from the energy sector and reach compliance with the EU methane regulation.

As you know, avoiding methane loss is one of the most efficient measures to tackle the threat of climate change. It also increases the volume of gas available for domestic markets and for exports. As an important element of our strategic partnership in the field of energy, the EU is keen to continue exploring innovative approaches to accelerate progress in this field and to showcase the progress we are making together.

In all our countries, developing domestic production of renewable energy can help save natural gas, ensure access to low-cost electricity, and boost industrial competitiveness. In the case of Azerbaijan in particular, efforts on energy efficiency and renewable energy have the potential to make significantly more gas available for the export markets in the coming years. The EU stands ready to step up cooperation with Azerbaijan to develop its tremendous potential, including with offshore wind power technology in the Caspian Sea.

On our side, in the last five-year term, EU legislators completed all the new measures to deliver on our Green Deal agenda and REPowerEU strategy, including more ambitious energy efficiency and renewable energy targets for 2030. Under the new Commission, we will focus on implementation. Last month, we presented a Clean Industrial Deal and an Affordable Energy Action Plan that will help us to deliver cheap, secure, and sustainable energy for our households and businesses by fast-tracking the clean transition, building a more connected energy union, and making our gas markets fairer and more competitive.

We want to deliver not just for Europe but for the world. As we step up the pace to meet our 2030 targets, it is not just about climate action. It is about economic opportunity, energy security, and affordability.

I am confident if we lead our people, invest in them, and bring them on board with a just transition, we can create history and secure our future.

In conclusion, Your Excellency, ministers, ambassadors, ladies and gentlemen, to deliver energy security for our citizens and to drive the energy transition for our future, we need to develop strong energy partnerships with each other. The EU looks forward to working together with Azerbaijan and other international partners to accelerate our work, strengthen our industrial bases, and put our economies on a path toward climate neutrality by 2050.

Together, let's enhance our energy security, unleash renewable energy investments, and promote trade across our markets. Thank you again, Your Excellency, for welcoming us today and steering our exchanges. I look forward to a very interesting and inspiring day.

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Parviz Shahbazov: Commissioner Jørgensen, thank you very much for an insightful speech. With your co-chairmanship, we hope that the energy dialogue between Azerbaijan and the EU will continue to develop and yield good results.

This concludes our opening session.

Mr. President, thank you very much for being with us today.

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A total of 24 countries, including Azerbaijan and the European Union, seven international financial institutions, and 42 energy companies participated in the meeting. The event was attended by ministers, deputy ministers, and other high-level representatives.

After the opening session, the meeting proceeded with three plenary sessions - Ministerial Session, Southern Gas Corridor Session: Progress and Next Steps in Successful Operation and Development of Southern Gas Corridor Plenary Session and Green Energy Projects and Green Energy Corridors Plenary Session.

Under the framework of the Advisory Council, the second Ministers' Meeting on the transmission and trade of green energy between Azerbaijan, Türkiye, Georgia, and Bulgaria was held. An informal Steering Committee/Ministers' Meeting on the Caspian-Black Sea-European Green Energy Corridor also took place, alongside a roundtable on the development of offshore wind energy between Azerbaijan and the European Union.

During the event, several documents aimed at enhancing cooperation in the energy sector were signed.

The ministerial meetings under the Southern Gas Corridor Advisory Council have been held regularly since February 2015.