According to the research firm Rystad Energy, the country’s gas production is expected to rise by 51% by the end of the decade, reaching 40 billion cubic meters annually, a significant increase from 2020 levels.
Several key gas and gas-condensate fields are under development, positioning Azerbaijan for this expansion. The Shah Deniz Phase 2 project, operational since 2018, has been a cornerstone of this growth, lifting gas production by 83% between 2017 and last year, when output reached nearly 36 billion cubic meters. Shah Deniz alone contributed about 72% of the overall gas production, reinforcing its critical role in Azerbaijan’s energy landscape.
Exports of Azerbaijani gas have mirrored this increase, with volumes rising from 9.6 billion cubic meters in 2018 to 24 billion cubic meters last year. Around half of these exports were directed to Europe, with Türkiye and Georgia receiving the rest. Azerbaijan has committed to further boosting its European exports, with a memorandum signed in 2022 to double export volumes to 20 billion cubic meters by 2027.
To accommodate these growing export demands, Azerbaijan is considering substantial pipeline expansions. Plans include doubling the capacity of the Trans Adriatic Pipeline (TAP) to 20 billion cubic meters annually, increasing the Trans Anatolian Pipeline (TANAP) from 16 to 31 billion cubic meters, and expanding the South Caucasus Pipeline to a similar level. However, these projects will require significant investments and long-term commitments from European buyers.
The country’s gas production reached over 33 billion cubic meters between January and August 2024, a slight increase from the same period in 2023. In contrast, oil production, including condensate, has seen a decline, further underscoring the shift toward gas as Azerbaijan’s dominant energy resource.
