When Russia attacked Ukraine in February 2022, it was clear to many in the European Union that they no longer wanted to work together with Moscow and Putin. Sanctions were imposed and imports were restricted or stopped completely. This also applied to Russian natural gas, which the EU had purchased in large quantities before the invasion.
Other suppliers had to be found quickly because the EU is heavily dependent on natural gas imports; Gas had to be saved. Germany was also looking for new opportunities: liquid gas was needed, an LNG terminal was opened in Mecklenburg-Western Pomerania, and Federal Economics Minister Robert Habeck cleaned clinics in Qatar.
At the EU level, pacts are made with close partners such as Norway when it comes to natural gas. But Azerbaijan, the oil and gas-rich state in the South Caucasus, also wants more gas in order to become more independent from Russia.
At the beginning of February 2022, in the wake of Russia's increasing aggression against Ukraine, the EU offered Azerbaijan to increase gas deliveries via pipelines through Turkey and Georgia towards the Adriatic.
A few months later, in July, EU Commissioner Ursula von der Leyen and Azerbaijani President Ilham Aliyev met in the capital Baku. Von der Leyen described the country as an “important energy partner” that had “always been reliable” – something similar was regularly heard about Russia before the start of the war.
Both sides signed a declaration of intent: gas deliveries from Azerbaijan to the EU are to be doubled and the southern gas corridor is to be expanded. When von der Leyen spoke in Baku, she said this corridor delivered more than eight billion cubic meters of gas per year. “And we will increase the capacity to 20 billion cubic meters in a few years. Next year it should be twelve billion cubic meters,” said von der Leyen at the time. The goal of 20 billion should be achieved as early as 2027 – around 18 percent of the annual requirement, writes the news site “Politico”.
A deal that was already controversial back then. Azerbaijan is criticized for civil and human rights violations and a lack of press freedom. Aliyev is considered an authoritarian president. According to the Freedom House Index, Azerbaijan is considered “not free” and according to Human Rights Watch, dissidents are under intense pressure.
On Tuesday morning, authoritarian Azerbaijan began a military operation to conquer Nagorno-Karabakh. After around a day of shelling that left dozens dead and injured, Azerbaijan and Karabakh representatives negotiated a ceasefire on Wednesday. The condition from the Azerbaijani side is the surrender of the Armenian fighters. The latest attack has reignited criticism of the gas deal and made it a sensitive issue for the EU.
In Germany, for example, the Left Party called for pressure to be put on Azerbaijan to stop military involvement in the Nagorno-Karabakh conflict region. “The federal government must ensure that all previous agreements between the EU and Azerbaijan are suspended as long as the war continues,” said party leader Martin Schirdewan on Thursday in Berlin.
The gas agreement is intended to further increase Azerbaijan's share of EU gas supplies. According to the commission, in 2022 it was only around three percent. President Aliyev said in December his country's gas exports to Europe would rise from an estimated 11.3 billion cubic meters to "at least" 11.6 billion cubic meters in 2023. Last year, the former Soviet republic delivered 8.2 billion cubic meters of the fuel to Europe, he added, according to the Reuters news agency.
Gas imports from Azerbaijan to the EU have already risen sharply since the agreement between the two partners, as figures from the statistics authority Eurostat show:
However, Azerbaijan is still a relatively small player when it comes to gas exports to the EU. According to figures from the Energy Institute, the Caspian Sea country delivered 11.5 billion cubic meters of natural gas to the EU in 2022. In percentage terms, Azerbaijan's share was just over three percent. Norway, Algeria, other European countries and Russia will deliver more during this period:
In Germany, gas from Azerbaijan is not yet on the list of gas suppliers, as data from the Federal Network Agency shows.
In recent years, Azerbaijan has been a relatively small gas exporter; before 2020, only Greece imported gas, the British research institute Royal United Services Institute for Defense and Security Studies wrote in October. That could change with the 2022 agreement. Azerbaijan wants to increase its production. In addition, the “modest volume” should not be downplayed. The gas market is geographically highly fragmented and transport is expensive. Azerbaijan is in the sphere of the EU, and the southern countries of the Union in particular could benefit.
On the question of possible EU sanctions against Azerbaijan because of the military operation, an EU spokesman said that the European Union was monitoring the situation very closely and that the member states would decide on further steps depending on developments on the ground.
Overall, a suspension of the gas agreement between the EU and Azerbaijan is likely to have only a minor impact. By November 2022, the EU had already been able to reduce the share of Russian gas imports to almost thirteen percent, according to data from the European Commission. From January to November 2022, the majority of gas supplies came as LNG from the USA, Qatar and Nigeria, and as natural gas from Norway, Algeria and Russia. Azerbaijan is not explicitly listed and falls under “Other” in the data.
Sources: Eurostat, Energy Institute, Statista, Bundesnetzagentur, Reuters and DPA news agency, Freedom House, Human Rights Watch, European Commission, European Council / Council of the European Union, "Politico", Royal United Services Institute for Defense and Security Studies, Der Neue Cosmos World Almanac