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Azerbaijan hopes for gas sector to boost economy

As oil output falls, the country wants its gas sector to play a bigger part in the economy

Oil has long been the cornerstone of Azerbaijan’s economy. So as production declines, the government is betting that increased gas production from mega-projects such as Shah Deniz phase 2 will compensate. But rising costs, long lead times and a lack of drilling rigs could make this ambition difficult to achieve. In the short to medium  term, heavy investment in gas production and export infrastructure is set to reinforce Azerbaijan’s increasingly important role as an energy supplier to Europe. Azeri officials say production from new wells will boost gas output to just under 30 billion cubic metres a year (cm/y) by 2017 from 2014’s expected 28.5bn cm/y. The bedrock of this supply will be the

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