EU wishes to maintain Russia-Ukraine gas transit
Date
6/12/2024 8:40:50 AM
(MENAFN) In a bid to secure the continued operation of Ukraine's natural gas transit infrastructure following the expiration of its contract with Russia's Gazprom, European Union officials are engaged in negotiations, as reported by Bloomberg on Monday. Despite the ongoing conflict between Kiev and Moscow, gazprom has upheld the terms of its transit agreement with Ukraine's Naftogaz, maintaining gas deliveries of approximately 15 billion cubic meters annually to Austria and Slovakia.
According to Bloomberg's sources, discussions are still in the early stages, with many details yet to be finalized. The European Union's preference is to diversify its gas sources by procuring gas from Azerbaijan instead of Russia and utilizing Ukraine's existing infrastructure for transit.
Alexey Chernyshov, CEO of Naftogaz, expressed his commitment to finding a solution to ensure the continued operation of Ukraine's gas transportation system, emphasizing its significance as a valuable asset. Chernyshov stressed that maintaining operational continuity is crucial to avoid financial losses.
While Kiev aims to retain revenue from gas transit, which amounted to $1 billion in 2021, Chernyshov has ruled out an extension of the current arrangement with Russia. However, challenges remain as Azerbaijan's pipeline to the European Union is already operating at full capacity, and Baku lacks direct access to Ukraine's network.
A potential solution being considered involves a gas swap arrangement, wherein Russia provides "Azeri" gas to the European Union, while Azerbaijan redirects "Russian" gas elsewhere. This arrangement would enable the European Union to uphold its trade embargo against Moscow while still accessing alternative gas sources.
Neither the Azerbaijani government nor the state oil and gas company SOCAR provided comments on the rumored deal when approached by Bloomberg. Similarly, Austrian authorities declined to offer any remarks on the matter. As negotiations progress, stakeholders are navigating complex geopolitical dynamics to ensure energy security and stability in the region.
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