BAKU, Azerbaijan, August 7. The World Bank
Group has approved a $15 million project aimed at detecting and
repairing gas leaks in the gas distribution network of the
“Azerigas” Production Association, as well as reducing methane
emissions in Azerbaijan.


This was announced in a statement by the World Bank Group.


According to the statement, the main objective of the “Azerigas
Gas Leak Detection and Repair Facility” project is to reduce
methane emissions resulting from leaks in the gas distribution
network operated by Azerigas, as well as to strengthen the
company’s asset management capabilities.


The World Bank notes that the project will establish a special
financial mechanism to detect and repair gas leaks. In the initial
phase, this mechanism will be funded by a grant from the Global
Flaring and Methane Reduction Fund (GFMR).


SOCAR will serve as the grant recipient and the holder of the
grant accounts and the financial mechanism. In turn, PO “Azerigaz”
will be the sole beneficiary of the grant and will be responsible
for the day-to-day implementation and management of the
project.


Funds will be transferred in stages from SOCAR to PO “Azerigaz”
to implement the agreed-upon measures for identifying and
eliminating gas leaks.


Annual gas leaks total 160 million cubic
meters


The World Bank notes that there are significant gas leaks in the
gas distribution network of the company “Azerigas,” primarily from
old facilities that are more than 50 years old.


According to preliminary estimates, the volume of gas leaks
amounts to about 160 million cubic meters per year, which is
equivalent to 107,000 metric tons of methane emissions per
year.


According to the analysis, approximately 80% of the leaks can be
eliminated within 7 years through relatively simple and
cost-effective measures.


The World Bank estimates that these measures will prevent
greenhouse gas emissions of approximately 2.4 million metric tons
of carbon dioxide equivalent per year.


The project will be based on the results of a pilot program to
determine baseline gas leak levels, implemented by Azerigas in
Baku.







Measures to eliminate gas leaks will be proposed and implemented
by Azerigas in accordance with pre-agreed criteria. The selection
of measures will take into account costs, technical complexity,
impact on emissions, and other relevant criteria.


Funds saved from gas losses will be
reinvested


A key element of the project is the reinvestment of a
significant portion of the funds saved from eliminating gas leaks
into a new financial mechanism.


According to the World Bank, this approach will make it possible
to mobilize additional financial resources and carry out a more
extensive rehabilitation of Azerigaz’s assets.


In addition, funds from the GPRFGM (Global Partnership for
Reducing Flared Gas and Methane) and, at a later stage, the
financial mechanism, will be used to strengthen Azerigaz’s capacity
in the area of monitoring, reporting, and verification (MRV) of
emissions. These activities are expected to be carried out in
accordance with the OGMP 2.0 standard for methane emissions
management in the oil and gas sector.


The World Bank believes that the GPRFGM grant will enable
Azerigaz to implement measures that would otherwise be impossible
due to limited financial resources and to significantly reduce
methane emissions over the course of this decade.


The project will receive $15 million


According to the World Bank, the project is expected to receive
$15 million in funding.


SOCAR is the project implementer, and Azerigaz is the borrower.
The project is scheduled for completion on October 1, 2029.


The project was announced on January 28, 2026, and approved on
August 6, 2026. The project is included in the World Bank’s “Europe
and Central Asia” regional portfolio.