Hungary and Slovakia agree on transit of Azeri-Russian gas through Ukraine: Bloomberg
European buyers are moving closer to concluding a deal with Azerbaijan to supply natural gas to the European market after the current transit agreement between Russia and Ukraine expires at the end of this year.
According to Bloomberg, companies from Hungary and Slovakia are preparing to sign a contract to supply 12-14 billion cubic metres of gas a year from Azerbaijan, using the existing pipeline system that currently transports Russian gas through Ukraine to the EU.
These supplies are intended to replace the current volumes Europe receives under the current transit agreement. The contract provides for a swap agreement between Azerbaijan and Russia, as Azerbaijan’s export capacities cannot yet fully cover the required volumes.
‘The incomplete agreement may help stabilise gas prices. The European Commission has previously assured that the completion of the transit agreement with Russia will not jeopardise the region’s energy security. Among the countries that continue to import Russian gas are Slovakia and Austria,’ the article says.
Under the terms of the agreement, Azerbaijan’s state energy company Socar will supply gas to Suzha on the border between Russia and Ukraine, after which Hungary’s MVM Zrt. and Slovakia’s Slovensky Plynarensky Priemysel AS will ensure its transportation to Europe.
Journalists emphasise that the deal will require political support from the Ukrainian authorities to reserve the capacity of the country’s gas network. Austrian company OMV AG said that by diversifying its supplies, it could provide fuel to its customers even if supplies from Russia were to be cut off.
‘The agreement will mean that Ukraine will continue to receive transit fees for the use of its pipeline network, which have been bringing the country about $800 million a year. For Azerbaijan, the deal strengthens energy ties with Europe. TheCaspian Sea country already supplies gas to eight countries on the continent via a pipeline that runs through Turkey,’ the journalists added.
