Azerbaijan's Gas Export Promises Fall Short of Reality
Azerbaijan's state energy company, SOCAR, has announced it is selling natural gas to Austria and Germany, bringing the number of countries supplied to 16, with 10 being EU members. However, the question remains whether Baku can fulfill its promised target of delivering 20 billion cubic meters (bcm) of gas to the European Union in the near future.
Azerbaijani leader Ilham Aliyev, speaking at the World Economic Forum in Davos, confirmed the new export arrangements. Yet, the announcement provides little insight into whether Baku is on track to meet its 2022 commitment to double gas exports to the EU to 20 bcm within the next few years. The original target was set for 2027, but Azerbaijan has already pushed back that deadline.
SOCAR disclosed minimal details about the supply deals with Austria and Germany, leaving uncertainty about whether Baku is increasing EU-bound gas exports or merely redirecting existing gas to new buyers. The company stated that deliveries will be made via the Trans Adriatic Pipeline (TAP), the westernmost section of the Southern Gas Corridor, which carries Azerbaijani gas to Europe.
The Austrian/German supplies may be linked to a recent TAP operating company announcement that expanded pipeline capacity by 1.2 bcm per year, starting in January. Similarly, the exports to Germany may be part of a deal with SEFE, a state-owned German energy entity, announced in mid-2025, under which SOCAR is supposed to supply up to 1.5 bcm per year for 10 years.
SOCAR, SEFE, and TAP have not confirmed the details of SOCAR's new exports, and Baku has remained silent on the Austrian importer and the volume it will import. This lack of transparency is not surprising, given the reduced amount and quality of energy news and data released by both Azerbaijan government agencies and energy companies operating there over the past year.
Azerbaijan's Energy Ministry used to release regular monthly bulletins on oil & gas production and exports, but since April 2025, only three bulletins have been issued. The most recent data, released on January 12, shows that Azerbaijan's overall annual gas production in 2025 was 51.5 bcm, a 2.4% increase from 2024, far lower than the growth rate needed to significantly expand exports to Europe. Azerbaijani exports to the EU actually declined slightly in 2025, totaling 12.8 bcm, a 1% drop from the previous year's volume.
The latest data raises concerns that Azerbaijan will struggle to meet its EU commitment and may not have enough gas to meet fast-growing domestic demand. Most of Azerbaijan's gas exports come from the BP-operated Shah Deniz field, whose production is currently being expanded through a second phase of development. However, BP has not confirmed the anticipated expanded rate of Shah Deniz production or disclosed the expected gas production from deep reserves below its ACG oil field.
TotalEnergies, the only operator offering clearer targets, produced 1.6 bcm from the Absheron field in 2025. A second phase of Absheron development is planned, which could raise annual production to 6 bcm, if TotalEnergies agrees to make the necessary investment. To date, no investment decision has been announced.
Despite the uncertainty about timelines, Baku has promised a significant portion of the extra Absheron output to Turkey. Turkish Energy Minister Alparslan Bayraktar announced on January 4 that Ankara had agreed to take 2.25 bcm per year of gas starting in 2029. This deal is good news for Turkey, as Ankara aims to reduce its dependence on Russian gas, assuming the planned expansion of the Absheron field proceeds.
The lack of information on reserves and future production is matched by a lack of clarity over plans to expand the three pipelines that make up the Southern Gas Corridor. Azerbaijan needs the corridor's overall volume to expand to facilitate any additional exports to the EU.
While the TAP pipeline expansion news offers some confirmation of Azerbaijan's commitment to boost exports to Europe, TAP's current capacity is far from its maximum potential of 20 bcm per year, which Baku promised to Europe in 2022. There is no indication of when or if investments will be made to expand TAP to its maximum capacity, or for the TANAP and the South Caucasus Pipeline (SCP). Both routes require new compressor stations, with the SCP also needing an additional pipeline, to enable Baku to increase EU-bound annual exports to even 16 bcm.
