Why the volatile South Caucasus is important for oil and gas supplies

Reading Time: 2 minutes

MOSCOW, (Reuters) – The control of Nagorno-Karabakh, a breakaway territory that was until recently controlled by ethnic Armenians, in the latest escalation of a decades-old conflict.

Developments over Karabakh could alter the geopolitical balance in the South Caucasus, where Azerbaijan is a major energy producer. The region is criss-crossed with oil and gas pipelines, though none are in close proximity to Karabakh itself.

Here is a short description of energy infrastructure in the region:

NUCLEAR

– Armenia is home to the Metsamor nuclear power station, which is already in a precarious situation due to earthquake risk.

OIL

– Azerbaijan’s primary route for oil exports is the Baku-Tbilisi-Ceyhan (BTC) pipeline, which accounts for around 80% of country’s oil exports and runs via Georgia and on to the Turkish Mediterranean coast. It has capacity of 1.2 million barrels per day, or more than 1% of global oil supplies.

– Azerbaijan’s total oil exports in January-July 2023 were 23.1 million tons (800,000 bpd), of which 76.3% flowed through the BTC. The country’s oil output stood at 498,000 barrels per day in August.

– Azerbaijan also exports oil via Russia through the Baku-Novorossiisk pipeline and via Georgia by rail, as well as a pipeline from Baku to Supsa in Georgia.

NATURAL GAS

– Azerbaijan has plans to increase natural gas exports to Europe.

– Gas production from the Azeri-Chirag-Guneshli (ACG) fields totalled 13.4 billion cubic metres (bcm) in 2022, while 25.2 bcm was produced from the Shah Deniz gas project, where BP is leading an international consortium.

Azerbaijan exported 6.6 bcm of natural gas to Europe in January-July.

Once you're here...

%d