EUROPE: Ukraine will not extend the Russian gas transit agreement to Europe, but offers to take gas from other sources if Europe asks. The Azerbaijani solution and the Russian warning
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Ukraine does not intend to extend in any way the Russian gas transit agreement to Europe, which expires at the end of 2024, according to the latest statements of President Volodymyr Zelensky, but if Europe asks, it can make its infrastructure available for gas from other sources
“No one will renew the agreement with Russia, this is the end,” Zelensky said.
However, he noted that, in case of a request from Europe, Ukraine is ready to discuss the possibility of transiting gas from other suppliers through its gas transportation system.
In July, the president of Azerbaijan, Aliev, announced negotiations with Russia on the possibility of expanding gas transit through Ukraine at the request of the Ukrainian authorities and the European Union.
Azeri gas could become one of the options for ensuring sustainable gas supply to Europe after the conclusion of the Ukrainian-Russian transit contract in 2024, as the head of Naftogaz’s board of directors, A. Chernyshov, also stated.
Ukrainian Energy Minister G. Galushchenko noted in early August that no specific proposals from Azerbaijan have been received so far, but they may be considered.
Azerbaijani gas exports have increased
According to information published by Bloomberg, if an unexpected gas transit situation occurs, Europe’s current gas reserves may not be enough for the winter season. In addition, the European liquefied gas reserve is limited. This summer, imports in the region fell by 15%-20% because Asian countries secured it by paying more.
The contract between Gazprom and Ukraine for the transit of natural gas expires at the end of this year. This raises the question: how will Europe meet its gas needs?
One solution could be Azerbaijan’s gas exports. Azerbaijan transports gas to Europe through the Southern Gas Corridor. The Trans-Adriatic Pipeline (TAP), part of this corridor, now has a transport capacity of 12 billion cubic meters per year. From January to June this year, Azerbaijan exported 6.4 billion cubic meters of natural gas to Europe, an increase of 0.7 billion cubic meters, or 12.3 percent, compared to the same period in 2023.
In total, Azerbaijan’s gas exports for the first half of the year totaled 12.7 billion cubic meters, marking an increase of 6% over the previous year.
The Russians’ warning
European consumers will face higher prices if Kiev does not agree to extend an agreement on the transit of Russian gas through Ukraine once it expires on December 31, the Kremlin said on Wednesday.
Spokesman Dmitry Peskov told reporters that if Kiev did not extend the deal, Russia could find alternative routes, such as the planned gas hub in Turkey.
“There are (other) routes, but, of course, such decisions by the Ukrainian side will seriously harm the interests of European consumers, who still want to buy more guaranteed, more affordable … Russian gas,” Peskov said.
He also said Europe would have to pay more for gas from other sellers, including liquefied natural gas supplied by the United States.
Most recipients of Russian gas through Ukraine said they were bracing for the end of flows later this year when the transit agreement between Ukraine and Russia expires, as Ukraine has said it does not want to renew it.
Another option is for Gazprom to supply part of the gas through another route, for example through TurkStream, but the capacity of this route is limited.
