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Uniper seeks to negotiate extra gas supplies with Azerbaijan - VP Michael Hilmer (Exclusive interview)

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BAKU, Azerbaijan, June 12. Uniper is looking forward to discussing the potential increase of gas supply from Azerbaijan, Michael Hilmer, VP at Uniper, told Trend in an exclusive interview.

"Azerbaijan is an important country for the EU's energy security and diversification of energy sources. Uniper as a buyer of natural gas from the Shah Deniz II project helps to facilitate the gas supplies from Azerbaijan to Europe. One of the current key issues for Uniper is ensuring the security of supply and diversification of energy flows into its portfolio. Azerbaijan with SOCAR as one of the main players has proven to be a very reliable partner in terms of secure and steady supply. We are looking forward to discussing the potential increase of those gas supplies especially in light of the strategic energy partnership entered mid-2022 by Azerbaijan and the EU Commission consisting of the plan to double the gas export capacity of the Southern Gas Corridor," he said.

According to Hilmer, decarbonization and energy transition are also Uniper's shared paths with SOCAR, and the two companies are actively engaged in various initiatives, arranging meetings, workshops, and site visits.

"We are ready to expand our cooperation to achieve our goals in terms of carbon neutrality. Uniper and SOCAR have been working together since 2008. In 2014, SOCAR and Uniper signed a formal cooperation agreement. Overall it covers best practice exchange in the fields of technology, energy business and HR," the VP pointed out.

Michael Hilmer further noted that the current focus topics of cooperation between Uniper and SOCAR are energy efficiency, energy transition and sustainability, renewables and clean fuels and women in STEM (science, technology, engineering, and mathematics) and leadership.

Moreover, as Uniper VP reported, at the moment, SOCAR-Uniper LLC is finalizing the first project to improve and enhance energy efficiency.

"The main objective of SOCAR-Uniper LLC joint venture is to carry out joint projects around energy efficiency. Currently, the joint venture is finalizing the first project to improve and enhance the efficiency of the Steam and Power Generator Complex located at Azerkimya PU in Sumgayit," he said.

According to Hilmer, the facility currently provides steam and electricity to the ethylene production unit.

"After adding a new steam turbine and upgrading the existing units, which will result in 52 MW of extra electrical production capacity and a significant increase in energy efficiency. The team is currently putting great effort into commissioning the project," the VP explained.

In general, as Michael Hilmer pointed out, there are ample opportunities for cooperation between SOCAR and Uniper in the renewable energy field.

"Uniper and SOCAR are both companies, that are developing a portfolio of renewable energy sources in their core markets to work on their goals to reduce carbon emissions. It is impressive to see, how many renewable energy projects are under development in Azerbaijan with a strong view of exporting green electricity to Europe," he said.

The VP noted that, as SOCAR just announced the signing of a shareholder agreement for joining a 1 GW renewables project in Azerbaijan, Uniper just entered a development partnership for a 600 MW onshore wind project in Poland.

"Uniper is committed to developing 10 GW of onshore wind and solar farms by 2030, focusing on key European markets," Michael Hilmer pointed out.

He also added that Uniper is currently testing the utilization of a former natural gas storage cavern in northern Germany for storing green hydrogen. "It is planned to develop a total working gas capacity of 250 to 600 GWh by 2030".

At the same time, green hydrogen has also been a topic of knowledge exchange within the cooperation between Uniper and SOCAR.

"For Uniper, hydrogen is a critical component of its decarbonization and energy transition strategy. Uniper published in August 2023 its new strategy named "Accelerating the Energy Transition – Flexible, Balanced, Bespoke". Uniper wants to reach carbon neutrality by 2040 by significantly investing in growth and energy transformation," he said.

According to the VP, the plans include the development of a portfolio of 15-20 GW power production which will be 80 percent green by 2030.

"Furthermore, Uniper is diversifying its gas portfolio to enhance the security of gas supply in Europe. The company’s ambition is for 5-10 percent of its portfolio to consist of green gases by 2030, including green hydrogen and derivatives and biomethane," Hilmer elaborated.

He explained that this target will be addressed by developing more than 1 GW electrolyzer capacity to produce hydrogen from green electricity supply, as well as developing a portfolio of green hydrogen and derivative products, and biomethane. "These are some steps Uniper is taking, which would limit the detrimental effects of future energy crises".

"Decarbonization is the dominating topic in current developments and activities of most energy companies. That could be seen here at the forum at various presentations and public announcements. However, the security of supply and diversification are increasingly important topics, as we just experienced during the European energy crisis. One of the main challenges most of the energy markets have in common under is the integration of the existing and new forms of energy. There will be many topics in this regard, where Uniper and SOCAR can learn from each other," he added.

Meanwhile, VP Hilmer also reminded that as a Bronze Sponsor of the 29th Baku Energy Forum, which took place on June 5-6, Uniper hosted a session themed "Gas dialogue: The role of gas supply during the energy crisis".

"This event is valuable for building and strengthening relationships with key local stakeholders and the international business community that operates in Azerbaijan and the region. Furthermore, the forum is a great source of information about new developments in the oil and gas sector, as well as in the fields of decarbonization, renewables, and energy transition projects in the country. These are all topics, which are of high relevance for Uniper in delivering its new strategy to accelerate the energy transition," VP Michael Hilmer concluded.

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