Summary

Azerbaijan’s suspension of work on its 12bn m3/y oil, gas, refining & petrochemical project highlights the complexity of getting the Caucasus gas balance right

Azerbaijan’s decision to suspend development work on its planned 12bn m3/yr oil, gas, refining and petrochemical project highlights the complexity of getting the gas balance right in the Caucasus both now and in the long-term. While the long-term future for gas supplies from indigenous sources looks promising, right now there are acute shortages forcing the region to look realistically at imports from Russia and optimistically at imports from Iran. In the long-term, should energy prices recover, the state oil company of Azerbaijan (Socar) intends to proceed with developing the massive $7bn oil and gas refining and petrochemical complex (OGPC) planned to be built alongside the existing oil and gas terminal at Sangachal. But in the short-term, it’s a very different picture, with the region in general, and Azerbaijan in particular, facing...