By Alex Kimani – Feb 22, 2026, 4:00 PM CST
- The EU has identified Azerbaijan as a cornerstone of Europe’s post-Russia energy strategy, aiming to double gas imports to 20 bcm annually by 2027 via the Southern Gas Corridor.
- Azerbaijan is expanding both gas supply and renewable energy links.
- Beyond energy production, Azerbaijan is positioning itself as a key transit hub, strengthening pipeline, power, rail, and freight corridors that connect Central Asia and the Caspian region to European markets.
Last July, Ukraine started importing natural gas from Azerbaijan for the first time in history, just months after it officially stopped the transit of Russian natural gas through its pipeline network in January 2025. Ukraine’s Naftogaz signed a supply agreement with Azerbaijan’s SOCAR Energy Ukraine that saw the former Soviet nation export its natural gas through the Trans-Balkan Corridor, with Ukraine looking to diversify its energy supply, enhance energy security, and offset significant domestic production losses caused by a constant barrage of Russian hits on its infrastructure.
The Trans-Balkan route is highly strategic for Ukraine because it not only provides it access to Azerbaijani gas through the Trans Adriatic Pipeline (TAP) but also LNG from terminals in Turkey and Greece, as well as access to the Black Sea shelves of Romania and Bulgaria.
However, Ukraine is hardly the only country that has deepened energy ties with Azerbaijan in recent years. The European Commission’s recent meta-study on the continent’s energy connectivity highlights Azerbaijan as a critical and strategic partner for the EU, particularly through the Southern Gas Corridor (SGC).
In 2022, the European Commission signed a Strategic Partnership in the Field of Energy with Azerbaijan, aiming to double gas exports to the EU to 20 billion cubic meters (bcm) annually by 2027. Azerbaijan provides a vital “Southern Corridor” for gas, helping Europe reduce its dependence on single-source suppliers like Russia. SGC is a 3,500km megaproject that connects Azerbaijan’s Shah Deniz field to Europe via the South Caucasus Pipeline, the Trans-Anatolian Pipeline (TANAP) and the Trans-Adriatic Pipeline (TAP).
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In January this year, Azerbaijan officially commenced gas deliveries to Austria and Germany, bringing the total number of countries using its pipeline gas to 16. Azerbaijan is already a primary gas supplier for Italy, Greece and Bulgaria. Azerbaijan exported approximately 12.9 billion cubic meters (bcm) of natural gas to Europe in 2024, good for a nearly 60% jump in just three years. This volume, delivered largely via the Trans Adriatic Pipeline (TAP), represents more than half of Azerbaijan’s total 25.2 bcm exports for the year.
Azerbaijan is also actively leveraging its vast renewable energy potential–estimated at over 200 GW–to transition from a hydrocarbon-dependent economy to a green energy producer, with Abu Dhabi’s Masdar and Saudi Arabia’s ACWA Power playing key roles in this transformation. Azerbaijan is transforming into a key Eurasian hub for the transmission of renewable energy with a focus on connecting Central Asia and the Caspian region with Europe. The Caspian/Black Sea/Europe Green Energy Corridor is a primary renewable energy project connecting Azerbaijan, Georgia, Romania and Hungary. A 1,155-kilometer, 1,300 MW undersea cable is planned to transmit wind and solar power from the Caucasus to Southeastern Europe. The EU has granted this project “Project of Mutual Interest” status, with completion aimed for 2032. The Trans-Caspian Energy Corridor is an initiative that connects the renewable energy resources of Kazakhstan and Uzbekistan, via a Trans-Caspian cable, to the Azerbaijan grid, feeding into the Black Sea route to Europe.
Last year, the Green Corridor Union LLC Joint Venture was registered in Baku to manage this project. Meanwhile, the Azerbaijan/Turkey/Europe Corridor is a critical southern, land-based power transmission route being developed to link mainland Azerbaijan with the Nakhchivan exclave and Turkey, strengthening connection to European markets. This includes the construction of 330 kV transmission lines along the Aras River as part of the Zangezur Corridor project. Further, Azerbaijan is currently working with Turkey and Bulgaria to further integrate with Eastern European grids.
Finally, beyond its own resources, Azerbaijan’s geography makes it a pivotal transit node.
Azerbaijan serves as the central hub for the Middle Corridor (Trans-Caspian International Transport Route), linking Chinese and Central Asian markets to Europe via the Caspian Sea, Georgia and Turkey.
The Middle Corridor is a faster alternative to northern routes, with freight volumes increasing rapidly. Azerbaijan’s Port of Baku is central to connecting Aktau (Kazakhstan) and Turkmenistan to the Caucasus. Cargo shipments are rising rapidly, with plans to triple freight flows by 2030. The Zangezur Corridor project aims to further boost connectivity, potentially increasing annual throughput by 15 million tons.
Meanwhile, the Baku-Tbilisi-Kars (BTK) Railway is entering a new expansion phase following significant modernization efforts. Last month, Azerbaijan Railways (ADY) and Georgian Railways JSC signed key agreements in Tbilisi to ensure the full operational launch of their joint venture, BTKI Railways LLC. A critical 184-kilometre section in Georgia has been successfully upgraded, increasing the line’s annual freight capacity from 1 million tons to 5 million tons.
By Alex Kimani for Oilprice.com
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Alex Kimani
Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com.
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