CHAIRMAN OF AZERIGAZ JSC: WE WILL MEET GAS NEEDS IN FUTURE
Caspian Energy Investor (CE): Mr. Melikov, what are the core principles of the gas economy development conception of Azerbaijan up to 2015? What are its major aspects?
Alikhan Malikov, Chairman, Azerigaz JSC: The core principles of development of the gas economy and its conception are based on Heydar Aliyev's Decree "On measures to improve energy supply for economy and population" effective from 2000. This document is a strategic ground that has defined the whole conception on the country's gas economy development.
The basic aspects of this conception are as following:
Stepwise full technical modernization of the gas transportation system to be implemented as following: introduction of up-to-date electronic counters at all important receiving offices including all industrial, communal and other facilities; full or partial substitution of morally and physically outmoded gas pipelines, gas-regulating equipment; construction (laying) of new main and distribution gas pipelines; equipping the gas transportation system with state-of-the-art gas receiving and distribution technologies; full computerization of tracing and recording the process of gas receiving, gas distribution and storage; introduction of the software system for individual control over gas consumption of each customer.
The process of installation of gas-meters in residential buildings started in 2005. For 01.01.2007 82.5% of works has been completed. By late 2007 this work will be completely finished.
The primary and strategic target of the above-mentioned activities is to provide energy security of the country and reduce with following stopping of gas dependence upon other countries.
CE: What is the Azerigaz's strategic objective in the near-term outlook? What changes has it undergone since Azerbaijan refused from Russian gas supplies?
Alikhan Malikov: The strategic task of Azerigaz JSC in the near-tern outlook is to implement the two basic decrees and enactments of Azerbaijani President Mr. Ilham Aliyev: "On approval of the State Fuel-Energy Complex Development Programme for 2005-2015" and "On approval of the State Programme on Social & Economic Development of Regions of the Republic of Azerbaijan for 2004-2008". These documents outline the programme of activities within the gas economy in 2004-2015 and concern development of the gas infrastructure of the country because the upgraded infrastructure will enable to fully meet both social and economic gas needs, to gasify regions without gas supply, to expand the gas supply network and increase the number of gas consumers. To achieve this target and solve the above-mentioned challenges Azerigaz JSC has already settled the problem with gas supply to the Nakhchivan Autonomous Republic. All relevant activities will be fully completed by the end of the year. At the same time, in 2006 Azerigaz provided gasification of mountainous regions Lerik and Yardimly. Since 2001 the gas supply to 32 regions of the country has been resumed. At the moment Azerigaz is enhancing the number of gas consumers in these regions. The gas-transportation system is ready to receive large volumes of high-pressure gas from Azeri-Chirag-Gunashli and Shah Deniz fields.
The general strategy and plans of Azerigaz after ceasing gas import from Russia and its final objective is to provide complete energy security of the country and reduce with further ceasing of gas dependence of the country upon import remained unchanged. In this regard the refusal from Russian gas perfectly fits in this strategy. That is why our priority is rational use of local gas. It was included in the 2007 draft energy balance.
The following factors are well-balanced components of the strategy: specification of real minimum, maximum and optimal gas need for each consumer group; selection of the most optimal variant of gas consumption for each consumer group; maximum operative regulation of limits for gas supply to both separate regions and large consumers so as to provide dynamic change of its volumes without gas losses.
Thus, through the refusal from Russian gas was some kind of test for us, I hope we will settle this problem through our local resources.
CE: How did gas consumption change within the last years? How will Azerigaz meet these needs? What works are implemented in this direction?
Alikhan Malikov: Over the last years gas consumption in the country including all consumer groups went up from 4.4 billion m3 in 2000 to 9.5 m3 in 2006. Today the projected volume of natural gas to be received by the gas transportation system amounts to 11-12 billion m3, which enables to meet current gas needs. At the same time, there is a system that technically enables to transport and deliver gas to consumers. I would like to mention that the volumes of gas consumption tend to grow within the next few years, whereas the throughput capacity of the gas transportation system can be expanded. This allows to suppose that we will be able to meet gas needs in future.
CE: How are the operations on gasification of the regions without the gas infrastructure and upgrade of existing infrastructure proceeding? How successful are these activities implemented? What stage of the upgrading of the gas transportation system of the country is being carried out now?
Alikhan Malikov: At the moment we dare say for sure that this work is successfully implemented. I would like to stress the operations on gasification, as I said above, also cover regions that formerly had no gas infrastructure. We have already upgraded all gas-supplied regions and now we continue operations in all other areas. Pursuant to the Decree of the president, gasification of new regions and modernization of the existing infrastructure resulted in the enhanced number of consumers that got increased by 351,300 people. Upon completion of the programme's implementation the total number of consumers will exceed 1.2 million people.
The list of successfully implemented works regarding the development of the gas-distribution system and some of its parts includes:
The overhaul of main gas pipelines in some directions, complete substitution of some parts; the currently implemented operations on full substitution of gas pipelines and equipment in Baku, in particular in all rural inhabited locations within the City; implementation of the Programme on technical reequipping of all gas operating departments, in particular, their computerization along with the activity on automated reading of gas-meters; the gas economy of the country is equipped with up-to-date laboratories that define the quality of gas and the gas reception and distribution centers as well as installation of gas-meters for all consumers in the country.
CE: How efficient was the installation of gas-meters for the population? How did it influence the process of collecting payments for consumed gas? Does the level of these collections satisfy you?
Alikhan Malikov: As I have stated above, installation of gas-meters for the population is a state programme, which is implemented according to the corresponding decrees of the Cabinet of Ministers. However, the installation of meters is not the final point, or let me say, the final target. The installation pursues the goal to provide exact control of gas consumed by each customer, to remove emerging misunderstandings and disputes between customers and the gas operating department regarding the volume of consumed gas, and as a result, settle problems related to the sum of payment, notes payable, removal of unnecessary bureaucratic requirements such as obtaining certificates that information about the family members from each consumer, etc.
Today we are pleased to state that customers with meters do not face such problems now as many issues regarding control over consumer gas have been settled. We will do our best to complete the process of installation of gas meters as soon as possible.
In conclusion, I would like to thank the team of the journal for an opportunity to share my thoughts about the condition and outlooks on development of the gas economy of the country and reassure the readers that Azerigaz JSC will keep on solving all gas supply-related problems in future.