EU energy ministers weigh options for Russian gas transit as Ukraine transit deal expires

Azerbaijan could play a pivotal role in maintaining gas flows to Europe as the EU seeks alternatives to Russian supplies through Ukraine.

Oct 15, 2024 - 12:00

EU energy ministers weigh options for Russian gas transit as Ukraine transit deal expires

Gazprom

European Union energy ministers are considering two main options to replace the current transit flows through Ukraine, Bloomberg reported on 15 October.

The ministers are meeting in Luxembourg on 15 October to discuss the future of Russian natural gas imports as a key transit agreement between Moscow and Kyiv nears expiration.

The transit agreement between Moscow and Kyiv allows Russian natural gas to be transported to Europe through Ukraine’s pipeline network. This agreement, set to expire in 2025, has been a key element in Europe’s energy supply and a source of revenue for Ukraine.

However, after the Russian full-scale invasion of Ukraine, Ukraine said it does not intend to renew the gas transit agreement with Russia after its expiration, citing both energy security concerns and the ongoing war with Russia.

According to Bloomberg, the EU ministers are grappling with maintaining energy security while continuing efforts to reduce dependence on Russian fossil fuels.

One involves replacing Russia with Azerbaijan as a supplier. The details allegedly remain unclear.

“With limited spare supply, exports from Azerbaijan to Europe would require swaps with Russia, making such an agreement politically controversial,” Bloomberg reports.

The second option could be for Azerbaijan’s SOCAR to take on Gazprom’s role in selling gas to Europe or facilitating transit through Ukraine. However, Bloomberg reported that both options face significant challenges.

“Some countries have internal issues clouding their judgment and preventing them from a fast switch. But it’s been two-and-a-half years, and it’s time to find an alternative,” Krzysztof Bolesta, Poland’s deputy climate minister, said.

“It is a Ukrainian decision how to deal with the pipeline, so it’s also their responsibility and their right to deal properly and responsibly with that,” European Commission President Ursula von der Leyen said.

According to Bloomberg, a final decision is expected to come “at the last minute or even at the beginning of next year.”

The EU has reduced its reliance on Russian gas, with storage facilities now full and Ukrainian transit accounting for less than 5% of the continent’s supplies. However, countries like Slovakia and Austria remain concerned about potentially higher prices if new import sources are required.

Fico had earlier in October expressed his intention to persuade Ukraine to maintain Russian oil and gas transit to Europe through its territory. Ukrainian Prime Minister Denys Shmyhal said Ukraine rejected extending the contract with Gazprom.

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