SOCAR Sets Sights on Balkans via Greece
The State Oil Company of Azerbaijan Republic (SOCAR)'s recent entrance into the Greek market via its DESFA acquisition seems to be Azerbaijan's first step into the Balkan region.
According to recent statements from SOCAR VP Elshad Nassirov, the company aims to use Greece as a staging point into the whole region of Southeastern Europe. The Azeris are looking into increasing the consumption of natural gas in Greece through investments in its local transmission network. Concurrently, a second business plan is being prepared that calls for a further upgrade of the Revythousa LNG terminal and the construction of a second LNG installation in the North of the country, close the rest of the Balkan markets. Last but not least, the interconnection with all neighbouring countries is eyed by SOCAR as a crucial investment.
SOCAR projects in countries such as Bulgaria mainly rely on pushing forward the Trans-Adriatic Pipeline (TAP) and connecting its gas flow through the interconnector system that is already being prepared.
Likewise, SOCAR is a fervent supporter of the Ionian-Adriatic Pipeline (IAP) that will shift gas from TAP and in Albanian territory to Montenegro-Bosnia and Croatia, in essence linking up with the central European gas system.
Already company managers are talking about "billions of dollars" worth of investments, emphasizing the long-term commitment of SOCAR in securing a firm place in Southeast Europe. It is playing well and advancing its role as a diversifying source of gas in contrast with the traditional supplier, Gazprom. The aim to establishing an LNG terminal is also a sign of an extrovert export strategy by SOCAR, which sets its eyes on international markets for that kind of gas.
Before it was bought by SOCAR, DESFA had drafted mid-term planning between for 2013-2022 that budgeted €1.662 billion in investments including a €159 million upgrade of the Revythousa LNG terminal. The remainder of the investments will go towards the expansion of the transmission system and establishing an underground gas storage facility.
Along with SOCAR's involvement, the investment budget could certainly increase and provide a strong push towards the creation of a natural gas hub and free market in Southeast Europe, which for the coming years will experience a variety of gas-related projects that will greatly boost gas supply and ease market tensions while ensuring energy security.
Over the coming generation, Azerbaijan will rapidly increase its share in the European natural gas import mix. However, its quantities are not simply enough to cover demand across the Continent and for a prolonged period. Thus it is safe to assume that SOCAR’s ambitions are mostly concentrated on securing a strong placement in the region between Greece and Croatia, whilst keeping a steady flow of exports to Turkey with some additional quantities delivered to world markets via LNG that is projected to offer competitive pricing for the foreseeable future.