Azerbaijan, one of the most strategic post-Soviet states in the area of energy and regional security, will turn into one of the world's largest exporters and transit states for hydrocarbons thanks to the realization of its far-reaching plans on gas production and supply.
The draft concept of socio-economic development in 2014 and the next three years, included in the budget package submitted for parliament's discussion, clearly outlines the country's further development plans in this direction.
The concept says that Azerbaijan's turning into one of the world's largest energy exporters can be materialized with the implementation of the Trans Anatolian Natural Gas Pipeline Project (TANAP) and the Trans-Adriatic Pipeline (TAP), which is part of the Southern Gas Corridor, along with the realization of Nabucco West pipeline project.
Gas to be produced within the second stage of Azerbaijan's Shah Deniz field development will be the main source for the Southern Gas Corridor, which envisages the transportation of Caspian gas to European markets.
The mentioned pipeline system, which is designed to supply Shah Deniz gas from the Caspian basin to Europe, will allow the pipeline infrastructure to transport gas from other fields and prospects of Azerbaijan, as well as gas from other countries in the region.
Earlier, EIA said in a report that Azerbaijan was among the 20 largest exporters of oil in the world in 2012, underlining that the country has played a significant role in the development of today's oil industry.
According to projections, the country's oil production will hit 51 million tons in 2015, while gas output will exceed 30 billion cubic meters.
The concept further reads that eight main areas were identified to further improve the fuel and energy sector of Azerbaijan.
In order to develop the energy sector the following key objectives in the coming years were defined: exploration for new deposits; comprehensive use of innovative technologies in the field of oil and gas production; large-scale development of the discovered fields; drilling of new and rehabilitation of old wells at the fields already under development; use of new techniques and technologies to increase the coefficient of oil-bearing.
Also, the concept stipulates improvement of the system of production, transportation and processing of oil and gas, development of oil and gas transport infrastructure with a view to more active participation in regional projects, and starting construction of the TANAP gas pipeline for the transportation of gas from Azerbaijan's Shah Deniz gas condensate field through Georgia and Turkey to Europe. It also envisions computerized control and information networks for the optimization of control over the processes of production and transportation of oil and gas and expanding the use of science and technology in the oil production sector.
The plans on the development of the oil and gas industry aim to reinforce energy independence and national security, intensify export-oriented oil and gas activities, increase the export potential of primary and secondary oil and gas resources, etc.
The document also notes that should the need arise a new oil terminal may be created at the new Baku International Sea Trade Port, which will be located in the Alat settlement, 65 kilometers south of the capital Baku.
The new port will allow the processing of dry cargo, transportation of containers and sending ferries. In the future, if the need arises, an oil terminal may be built there.
The construction of the new port and the relocation of the old port from the capital's center is important from the viewpoint of partial reduction of congestion on the streets of Baku and the improvement of the environmental situation in the city.
As early as in 2015, the port will be able to handle 11.6 million tons of cargo a year.
Meanwhile, Azerbaijan's energy giant SOCAR continues work on the construction of new oil, gas and petrochemical complex (OGPC), which will meet the country's growing demand for petroleum products.
The project envisions construction of a petrochemical enterprise with capacity of 1.7 million tons of finished products, an oil refinery with capacity of 10 million tons per year as well as a gas processing plant with capacity of 10 billion cubic meters per year.
The resource-rich South Caucasus republic has proven gas reserves of 2.2 trillion cubic meters and plans to double its natural gas output to some 54 billion cubic meters a year by 2020. The country's proven crude oil reserves were estimated at 7 billion barrels in January 2013.
Over $45 billion has been invested in the oil and gas sector of Azerbaijan since 1994. Over the entire period of hydrocarbons production in Azerbaijan 665 billion cubic meters of gas have been extracted. The country produced a total of 1.8 billion tons of oil during this period.
Azerbaijan ranked 81st in the energy sustainability index of the World Energy Council among 129 countries of the world. In terms of energy security indices, Azerbaijan ranked 32nd, surpassing other South Caucasus countries, Armenia (95th) and Georgia (106th).