Europe – through the EU’s Third Energy Package and other energy security initiatives – is working on diversifying its gas supply, given than upwards of 70 percent of European gas is currently supplied by only two countries: Russia and Norway. German Chancellor Angela Merkel has shown great interest in developing the Southern Gas Corridor to deliver gas to Europe from the Caspian. Last month in Azerbaijan, she discussed energy issues, including improving the infrastructure that transports gas from Azerbaijan to Europe via Turkey. During the visit, German energy giant Uniper and Azerbaijan’s state oil company, SOCAR, signed a deal to improve the energy efficiency of oil and gas production in Azerbaijan.
This comes as the Caucasus nation is planning to launch the second stage of a gas pipeline from the Shah Deniz field to Europe. Shah Deniz II is projected to produce 16 billion cubic metres (bcm) of gas per year starting in 2020, with 10 bcm set to go to Europe.
Still, the European gas market remains way too dependent on just a few – and some geopolitically controversial – players, at the same time that its indigenous gas production is decreasing (after the Netherlands decided to stop production at the Groningen field, the largest single gas field in Europe).
Against an increasingly energy-scarce backdrop, Southern Europe, and its increasingly rich region of resources, may be the Union’s saving grace.
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