GECF Secretary General Speaks at 26th Caspian Oil & Gas Conference in Baku
GECF Secretary General Dr. Sentyurin delivered the keynote speech during a ministerial panel entitled Synergy – The Path to Global Improvements; Towards Energy Security and Sustainability on the first day of the 26th Caspian Oil & Gas Conference, in the capital of the GECF member country of Azerbaijan last week.
To pass his compliments to Azerbaijan’s leadership and to discuss the progress of the upcoming 5th GECF Summit and 2nd International Gas Seminar in Malabo Equatorial Guinea, HE Dr. Sentyurin met with HE Parviz Shahbazov, Minister of Energy of Azerbaijan on the sidelines of the event.
In his address, HE Secretary General covered both Azerbaijan’s history and its future in the energy system. From being home to the very first industrially drilled oil well and oil pipeline to the future of the Caspian region and GECF countries in general.
Dr. Sentyurin explained that according to the GECF’s Global Gas Outlook (GGO), overall demand for natural gas is set to rise in years to come, reaching 26% of the global energy mix by 2040 - the only hydrocarbon to increase its share. This is largely due to global economic growth, which is set to grow at an average pace of 3.4% on average for the forecast period from 2018 to 2040.
He explained that most of this growing demand will come from the Asia-Pacific region, and mainly from China and India, but that Europe would continue to be an attractive market.
From a sectoral perspective, the power generation, industry, and transport sectors are projected to be the biggest contributors to the incremental gas demand, accounting for almost 65% of the total demand in 2040. The transport sector is set to be an important emerging sector, with an overall increase that will reach 357 bcm in 2040.
When zooming in on Europe, HE Secretary General said the GGO forecasts an overall decline in energy use, but that the demand for natural gas would continue to rise. This trend is opposite to local European gas production, which is set to fall significantly by 2040, he explained. This leads to a need for increased gas imports in Europe, which Dr. Sentyurin said could reach over 430 bcm by 2040, with the share of GECF gas supply to Europe reaching up to 80%.
‘According to the GECF’s latest modeling scenario, the Caspian region is projected to increase its gas production by a staggering 54%. Azerbaijan, along with Turkmenistan and fellow GECF members Iran, Russian and Kazakhstan, will be the most important contributors to this expansion. A number of projects that are currently underway will connect consumers in Eurasia to a larger geographical reach’, Dr. Sentyurin explained.
He went on to say that Azerbaijan holds more than 1400 bcm of proven reserves and possibly around 1000 bcm of yet-to-find gas resources. He praised the leadership of the government for vigorously expanding the country’s export potential and securing its position as a key gas supplier in the Western Caspian region. HE Secretary General said that, taking into account the output from several new projects, the natural gas production outlook for Azerbaijan was very promising, but that in line with global upstream investment trends, the exploration and development of new fields need to be prioritized, in order for exports to continue in the long term.
Dr. Sentyurin also applauded Azerbaijan’s efforts in expanding energy access to its citizens by ensuring the supply of affordable and clean gas to the residential sector. He pointed out that this was an impressive step forward towards meeting the UN’s 7th Sustainable Development Goal, access to affordable and clean energy, which underpins the elimination of poverty and progress towards sustainable development.
Continuing on the theme of sustainable development, he stated that Azerbaijan is not only making strides in providing energy access but highlighted the country’s commitment to reducing emissions and producing energy in a more responsible and environmentally friendly manner. And as a result of government policies to mitigate environmental impacts from industry, he said that Azerbaijan has been quite progressive when it comes to flaring reduction. He clarified that the country’s total flaring was 200 million cubic meters per year in 2018, about 78% less than in 2008.
He added that the construction of the Southern Gas Corridor - which has a total capacity of 16 bcm - has opened up new markets for Azerbaijan in Europe. A total of 6 bcm is already set to be supplied to Turkey after the commissioning of the Trans-Anatolian gas pipeline (TANAP) last year.
Dr. Sentyurin concluded that the Caspian gas industry is positioning itself solidly in the markets and emphasized the weight of the GEFC countries of this region are contributing immensely to the stability of the global gas market, to enhancing worldwide energy security and the ever-so-crucial balance of supply and demand.