The World Bank has postponed the approval date by its Board of Directors for an investment financing project aimed at detecting and eliminating gas leaks in the gas distribution network of Azerigaz, a production association of the State Oil Company of the Azerbaijan Republic (SOCAR).
According to Report, which cites the World Bank, the project was initially scheduled for consideration on April 23 but has now been rescheduled to May 21, 2026.
The total cost of the project amounts to $15 million.
The initiative aims to reduce fugitive methane emissions from the gas distribution network operated by Azerigaz, as well as to strengthen the company"s asset management capacity.
The World Bank estimates that Azerigaz faces significant gas leaks due to aging infrastructure, much of which has been in operation for more than 50 years. The volume of leaks is estimated at approximately 160 million cubic meters of gas per year, equivalent to 107 kilotons of methane (CH₄). Analysis suggests that about 80% of these leaks by volume could be eliminated through relatively simple and cost-effective measures within seven years.
The Bank notes that, using a global warming potential (GWP) factor of 28, the project could reduce greenhouse gas emissions by approximately 2.4 million tons of CO₂ equivalent annually.
As part of the project, a dedicated Leak Detection and Repair (LDAR) mechanism will be established within Azerigaz"s gas distribution system. It will be launched with an initial grant from the Global Flaring and Methane Reduction Partnership (GFMR) trust fund. SOCAR will act as the grant recipient and fund account holder, while Azerigaz will be the sole beneficiary and implementing entity responsible for day-to-day execution and management.
Funds will be channeled from SOCAR to Azerigaz to carry out agreed leak detection and repair activities, enabling a gradual reduction in fugitive methane emissions. The project will build on Azerigaz"s pilot program to establish a baseline for gas leaks in Baku.
To ensure long-term sustainability, a key feature of the mechanism will be the reinvestment of most of the financial gains from gas savings achieved through leak reduction back into the Fund. This will help mobilize additional capital for further rehabilitation of Azerigaz"s assets.
In addition, GFMR funding at the initial stage, followed by the Fund"s own resources, will be used to enhance the company"s capacity in monitoring, reporting, and verification (MRV) of emissions in line with the Oil and Gas Methane Partnership 2.0 (OGMP 2.0) standard.
According to the World Bank, the grant financing will enable the implementation of measures that would otherwise be unfeasible due to Azerigaz"s financial constraints, ensuring methane emission reductions already within the current decade.
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