Azerbaijan’s plan of increasing natural gas exports to Europe by 2027 may hit a roadblock, reported Bloomberg, citing sources.
The country is yet to secure long term deals it needs before it can invest billions in boosting gas production, the sources.
Following the Russian invasion of Ukraine, Azerbaijan was in talks with more than ten European nations.
According to the sources, so far the talks on the terms of the deal have not been conclusive.
The change in plans has occurred as Europe's energy crisis has subsided after supply disruptions and record prices in 2022, the publication said.
It added that the continent still needs gas, but Azerbaijan may have run out of time to get the long-term agreements it needs to support infrastructure expenditures.
Currently, customers in Europe are reluctant to commit to using fossil fuels for a long period, and in a few years, gas from other sources such as Qatar and the US will start to flow.
In contrast to permanent pipelines, the majority of new liquified natural gas (LNG) infrastructure consists of floating import terminals that can be disconnected and moved to a different location as per the demand.
In April this year, Bulgaria, Romania, Hungary, and Slovakia signed an agreement to increase gas supply from Azerbaijan to the European Union (EU).
Romania has already stated that signing long-term contracts would be difficult.
In Germany, the gas importer Securing Energy for Europe’s representative said that “beyond initial talks, there have not yet been any concrete consultations with Azerbaijan.”
Socar, the state energy company of Azerbaijan, declined to comment on the news, reported the publication.
Aside from the uncertainty surrounding long-term logistics of supply and demand, Azerbaijan's gas supplies are also entangled in geopolitical issues.
European consumers may be influenced by Azerbaijan's recent occupation of the Nagorno-Karabakh region, the publication said.
Last month, Socar’s LNG trading arm began operations in Singapore to capture the market in Asia.
