BAKU, Azerbaijan, April 9. Trend International News
Agency presents an overview of key events in the first quarter of
2026 in Azerbaijan's energy sector.
Gas Sector
On January 4, Azerbaijan and Türkye signed a new agreement for
the supply of 33 billion cubic meters of natural gas, marking a
significant step in strengthening regional energy cooperation.
Azerbaijan has released revenue forecasts for its oil and gas
fields for 2026. Net hydrocarbon revenues are expected to reach
$5.03 billion (8.55 billion manat). The projected figure in manat
for 2026 is 2.91 billion, which is 25.4% lower than actual revenues
in 2024 and 1.24 billion manat, or 12.7%, lower than the forecast
for 2025.
The Accounts Chamber published projections for Azerbaijan’s oil
and gas transit revenues in 2026. According to the budget of the
State Oil Fund of the Republic of Azerbaijan (SOFAZ), transit
revenues through the country are forecasted at $2,200, or 3,700
manat. This represents a 0.5 million manat decrease compared to
actual 2024 revenues and 25.4 million manat below the approved 2025
forecast, while remaining roughly in line with expected 2025
revenues.
On January 20, Rovshan Najaf, President of the State Oil Company
of Azerbaijan (SOCAR), met with Musabbey Al Kaabi, CEO of the
Upstream Division of Abu Dhabi National Oil Company (ADNOC) Group,
to discuss the full-scale development of the Absheron
gas-condensate field.
On February 19, bp, the operator of the Azeri-Chirag-Guneshli
(ACG) oil field and Shah Deniz gas-condensate field in the Caspian
Sea, announced the extension of its contract for the operation and
maintenance of platform drilling rigs with Turan Drilling &
Engineering Company LLC, a joint venture between SOCAR AQS and
US-based Helmerich & Payne (H&P).
On March 3, meetings of the Southern Gas Corridor and Green
Energy Advisory Councils were held in Baku. During the sessions, a
Memorandum of Understanding on renewable energy cooperation was
signed between the State Agency for Renewable Energy under the
Ministry of Energy of Azerbaijan and the Croatian company Energia
Naturalis d.o.o.
On March 5, SOCAR, together with partner Asarel Group, completed
the preliminary design and front-end engineering design (FEED)
documentation for a gas distribution network project in
Panagyurishte, Bulgaria.
According to the latest data from the State Statistics
Committee, Azerbaijan exported 4.38 billion cubic meters of natural
gas (in gaseous form) worth $1.28 billion from January through
February 2026.
The start date for natural gas production at the Absheron field
has been confirmed. Full-scale development in the Azerbaijani
sector of the Caspian Sea is scheduled to begin on September 1,
2029. In the first two months of 2026, Azerbaijan produced 8.18
billion cubic meters of natural gas.
Oil Sector
On January 8, the State Oil Company of Azerbaijan (SOCAR) and
France’s TotalEnergies discussed the full-scale development of the
Absheron gas-condensate field.
The following day (January 9), Azerbaijan shipped a total of
2,698 tons of cargo (48 railcars) to Armenia, including 1,742 tons
of AI-95 gasoline and 956 tons of diesel fuel. On the same day, bp
announced preparations for deploying the first Light Well
Intervention Vessel (LWIV) in the Caspian Sea at the Deepwater
Gunashli field.
On January 11, a train of 18 railcars carrying 979 tons of AI-92
gasoline departed from Azerbaijan to Armenia.
Azerbaijan also released its production forecast for the
Azeri-Chirag-Guneshli (ACG) project for 2026. Oil output at the ACG
field is projected at 120.1 million barrels, slightly lower than
the 2025 figure of 123 million barrels. Correspondingly, revenues
from the field are expected to reach $4.23 billion.
On January 12, SOCAR launched its Quality & Document Management
System (QDMS) platform, reinforcing operational efficiency. The
market value of SOFAZ’s investment portfolio in Italy was announced
at $2.8 billion.
At a January 13 meeting with Kenan Mirzayev, CEO of Petkim and
head of SOCAR Türkiye’s refining and petrochemicals business, CNCEC
Chairman Mo Dingge confirmed that the company is ready to deepen
cooperation with SOCAR, particularly in international market
expansion, emphasizing long-term strategic energy and chemical
sector partnerships.
SOCAR also announced plans for the Kulevi terminal, including
construction of a new storage tank farm in 2026, with completion
expected by mid-2027. On January 16, Azerbaijani gas began flowing
to Austria and Germany.
On January 20, SOFAZ signed a strategic cooperation protocol
with BlackRock, the world’s largest asset manager, and its
affiliate Global Infrastructure Partners (GIP), with planned
investments of up to $1.5 billion in infrastructure and digital
projects. On the same day, SOCAR Carbamide joined the prestigious
Global Lighthouse network of the World Economic Forum (WEF) and
received the Digital Lighthouse Award. SOCAR also held discussions
with Planet Labs PBC on using advanced satellite imagery and
geospatial analytics for environmental monitoring.
On January 22, SOCAR acquired a 10% stake in the Baleine oil and
gas development project in Côte d’Ivoire through an agreement with
Eni S.p.A. On January 26, the SOCAR Drilling Trust completed
another well in the West Absheron field.
On January 28, SOFAZ and the Arab Energy Fund partnered with CVC
DIF to invest in a joint investment vehicle operating alongside DIF
VII, which previously acquired a 50% stake in PAL Cooling Holding,
a leading district cooling operator in the UAE. On the same day,
SOCAR signed a framework cooperation agreement with China’s CITIC
Construction Co., Ltd. SOCAR is also exploring the use of drones
and advanced data modeling for asset valuation.
The Heydar Aliyev Oil Refinery plans to produce 1.4 million tons
of Euro-5 gasoline and 2.3 million tons of diesel fuel in 2026.
Drilling of a new multilateral well is planned at the East Azeri
platform in the ACG block.
On February 6, the European Commission approved the joint
acquisition of SOCAR Aliağa Liman İşletmeciliği A.Ş. ("SOCAR
Terminal") by SOCAR Türkiye Enerji A.Ş. ("STEAS") and Terminal
Investment Switzerland Sàrl ("TISS"), jointly controlled by MSC
Mediterranean Shipping Company Holding S.A. (Switzerland) and
BlackRock, Inc. (USA).
On February 19, SOCAR signed an Exploration, Development, and
Production Sharing Agreement with Gran Tierra Energy Inc. for a
promising onshore block in the Guba-Caspian region. On February 25,
SOCAR and Samsung E&A Co., Ltd. signed a memorandum of
understanding to explore energy asset efficiency, production
localization, regional industrial development, human capital
growth, and decarbonization initiatives.
On February 27, SOCAR and bp signed an agreement on seismic and
well exploration in the Caspian Basin.
Azerbaijan has also begun developing unconventional oil and gas
resources, as announced by SOCAR President Rovshan Najaf at the
US-Azerbaijan Trade and Business Conference marking the 30th
anniversary of the US-Azerbaijan Chamber of Commerce. Najaf
emphasized that this initiative had not previously been a priority
due to abundant Caspian fish stocks.
On March 11, the US Energy Information Administration (EIA)
released its oil production forecast for Azerbaijan for 2026-2027.
Production of oil and other liquid hydrocarbons is expected to
average more than 540,000 barrels per day in both years, down from
over 570,000 barrels per day in 2025. In 2026, production is
projected at over 550,000 barrels per day in Q1, over 540,000 in
Q2, and over 530,000 in Q3 and Q4. A similar trend is expected for
2027.
According to the State Customs Committee, Azerbaijan exported
3.6 million tons of crude oil and bituminous petroleum products
worth $1.70 billion from January through February 2026. In the same
period, the Baku-Tbilisi-Ceyhan (BTC) pipeline transported 4.05
million tons of transit oil, and the Baku-Tbilisi-Erzurum pipeline
transported 3.68 billion cubic meters of gas.
Green Economy
On January 7, construction of the Khizi-Absheron Wind Farm (WPF)
was completed, marking a significant milestone in Azerbaijan’s
renewable energy expansion.
On January 13, global engineering group RINA and HPC Hamburg
Port Consulting, a leading firm in port, terminal, and logistics
consulting with expertise in sustainable digitalization and
intermodal rail operations, were awarded a five-year contract under
the OSCE project "Promoting Green Ports and Connectivity in the
Caspian Region."
Azerishig Open Joint-Stock Company announced plans to construct
a new substation in the Goygol district, including a 2x40 MVA
110/35/10 kV substation and control center, installation of
equipment, an 11.5-kilometer 110 kV double-circuit overhead power
line from Dashkesan 1-2 to the new substation, and major repairs to
existing transmission lines.
On January 15, the Italian company CESI began preparing a
feasibility study for the Trans-Caspian Green Energy Corridor.
On January 19, Tural Aliyev, General Director of Green Corridor
Union LLC, held the first meeting with Asian Development Bank (ADB)
representatives Nana Gurgenidze and Altynay Arapova to discuss
collaborative initiatives.
On January 20, SOCAR exchanged views with Honeywell on
sustainable development, renewable energy, and human capital
development, emphasizing long-term cooperation in energy transition
initiatives.
Phil Cole, Director of Industrial Affairs at WindEurope,
announced that following a March 2024 memorandum of understanding
between WindEurope and the Azerbaijan Renewable Energy Agency, the
association will support Azerbaijan in expanding its wind energy
capacity. WindEurope will provide best practices, risk analysis,
guidance on onshore and offshore wind projects, and insights into
the European power purchase agreement (PPA) market, while also
facilitating connections with policymakers, regulators, and
potential electricity buyers in Azerbaijan and the EU.
On January 29, construction began on the Zangezur power
transmission line, further strengthening Azerbaijan’s energy
infrastructure.
On February 2, Azerbaijani Deputy Energy Minister Orkhan
Zeynalov, alongside deputy energy ministers from Kazakhstan and
Uzbekistan, representatives of CESI SpA, ADB, and the respective
national electricity companies, held the first online meeting on
the feasibility study for the Central Asia-Azerbaijan Green Energy
Corridor. Zeynalov emphasized the project’s role in deepening
regional energy ties and promoting low-carbon development. The
feasibility study, led by CESI SpA in collaboration with Türkiye’s
EPRA and the UK’s JURU, will define the initial project
framework.
The Astara modular power plant has generated 2.2 billion
kilowatt-hours of electricity since its launch, while Azerbaijan
received its first-ever carbon credits in the green energy sector
on February 10.
On February 11, BP announced the sale of a 10% stake in Shafag
Jabrayil Solar Limited (SJSL) to MVM Energetika Zrt. (MVM).
On February 24, Deputy Energy Minister Elnur Soltanov confirmed
that CESI had been selected to conduct the feasibility study for
the Central Asia–Azerbaijan Green Energy Corridor, with preliminary
studies expected to be completed within 11 months, potentially by
early 2027. On the same day, Real Hajiyev of the European Bank for
Reconstruction and Development (EBRD) announced plans to start a
feasibility study for rehabilitating water infrastructure in Baku
and the Absheron Peninsula, in cooperation with the State Agency
for Water Resources of Azerbaijan.
On February 27, the Ministry of Energy released its 2025 report,
noting Romania’s intention to join the
Azerbaijan-Georgia-Türkiye-Bulgaria "green" energy corridor.
Türkiye has prepared a draft protocol to amend the April 2025
Memorandum of Understanding, which is currently under review,
alongside a coordinated draft Terms of Reference (ToR)
document.
As of March 3, the Garadagh solar power plant had generated over
1.1 billion kilowatt-hours of electricity, supplying it to
Azerbaijan’s national grid.
According to the State Customs Committee, Azerbaijan exported
72.2 million kilowatt-hours of electricity from January through
February 2026. Meanwhile, the State Statistics Committee reported
that 141.6 million kilowatt-hours of electricity were generated at
wind farms in the country during the same period.
