With the current agreement for the transit of Russian gas to the European Union expiring at the end of this year, European government representatives are negotiating with Ukraine to secure gas supplies for the following year. One proposed solution involves Azerbaijani gas transit via Ukraine through the existing Russian pipelines that run to Europe.
This development, reported by Bloomberg, highlights Europe’s ongoing efforts to reduce its reliance on Russian gas.
Despite these efforts, several Eastern European countries continue to receive Russian gas through a pipeline traversing Ukraine.
The contract governing this transit arrangement is due to lapse at the year’s end, and with the ongoing conflict, many market observers expect gas supplies to cease.
In response to this impending supply disruption, European government officials and energy companies are in discussions with their Ukrainian counterparts to ensure continued gas delivery next year.
A key proposal under consideration involves European companies purchasing Azerbaijani gas and injecting it into the Russian pipelines that lead to Europe. This arrangement would enable Europe to avoid the complications associated with buying Russian gas while striving to limit revenue to Moscow.
The proposal is gaining traction as it becomes evident that Ukraine would stand to benefit significantly. Transit fees contributed approximately $1 billion to Ukraine’s economy in 2021. There are also concerns that disused pipelines could become military targets or deteriorate, making costly repairs necessary.
Ukraine boasts an extensive gas transit and storage infrastructure, which should be utilised, according to Naftogaz CEO Oleksiy Chernyshov. He emphasised that Ukraine is keen to leverage this infrastructure due to the numerous benefits it offers. Chernyshov dismissed any plans involving collaboration with Russia’s Gazprom, stating that gas supplies from Azerbaijan “may have a future.” Azerbaijan is already using its pipeline to Europe to full capacity.
The move to explore Azerbaijani gas as an alternative underscores Europe’s strategic shift in energy policy, aiming to diversify its sources and reduce dependency on Russian gas. This shift has been accelerated by geopolitical tensions and the ongoing conflict in Ukraine, prompting Europe to seek more stable and politically favourable energy partnerships.
As Europe navigates these energy challenges, the successful implementation of the Azerbaijani gas transit proposal could serve as a critical step in enhancing energy security and resilience. It would not only mitigate the risks associated with Russian gas supplies but also strengthen the economic ties between Europe and Azerbaijan, potentially leading to further collaborations in the energy sector.
Furthermore, utilising Ukraine’s transit infrastructure aligns with broader European support for Ukraine amidst the conflict, reinforcing the country’s role as a key player in the region’s energy landscape. This approach could also provide a much-needed economic boost to Ukraine, helping to stabilise its economy during these turbulent times.
Read also:
Jeyhun Bayramov: EU is Azerbaijan’s largest trading and investment partner
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Main Image: Government of Azerbaijan.
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