Ukrainian President Volodymyr Zelensky could be in luck, as a new gas deal between European buyers and Azerbaijan is reportedly underway that would keep Ukraine as part of the transport route but exclude Russia as the supplier.
Hungarian and Slovakian companies are working on a commercial agreement with Azerbaijan to create a new deal that will allow natural gas transit to continue on the continent after the current agreement between Russia and Ukraine expires, Bloomberg reported.
As Russian President Vladimir Putin maintains a close relationship with Slovak Prime Minister Robert Fico and Hungarian Prime Minister Viktor Orbán, this new deal replacing the Russian gas supply would effectively halt Russia’s fuel exports to Europe.
Newsweek reached out to the Ukrainian, Russian, and Azerbaijani Ministries of Foreign Affairs via email for comment.
Both Fico and Orbán have shown their support of Putin, as Fico has repeatedly said that Ukraine cannot win its war against Russia, and Orbán pushed to block European funding going toward aid for Ukraine in January.
The current agreement between Russia and Ukraine is five years long, and with war waging between the two countries, Europe has looked for other sources of gas.
A ship in the Baltic Sea set to construct pipeline for Russian gas exports in 2019. A commercial agreement between Azerbaijan, Hungary, and Slovakia is in the works and would replace Russia as the main gas exporter to Europe.
Stefan Sauer/Associated Press
The current transit deal expires at the end of the year, and efforts to work out an agreement with Azerbaijan to have them replace Russia as the new supplier have been in the works for months.
The contract, for 12-14 billion cubic meters of gas per year from Azerbaijan, would use the same route that transports Russian gas through Ukraine to the European continent.
Bloomberg reported that the contract would need to include a clause allowing for what is known as a “swap-agreement” between Moscow and Azerbaijan, as the country between Eastern Europe and West Asia does not have enough export capacity to meet the current supply.
The Slovak state-owned buyer SPP said that previous reports of the deal being close to finalizing are incorrect.
The company told Reuters, “We regularly discuss the topic with our partners, but the information about the upcoming conclusion of a gas supply contract with the participation of SPP is not true.”
Despite the discussions of a new deal and the current war, Russia has reportedly said it is willing to continue supplying Europe with gas and transporting it through Ukraine. However, Kyiv has refused to engage in negotiations with Moscow.
Kremlin spokesperson Dmitry Peskov told reporters on Friday about the deal in the works and said, “How events will continue to unfold, how supplies will continue to be ensured, taking into account the fact that Ukraine has already announced its refusal to extend this agreement, now I can’t say anything.”
Slovakia, Austria, and Hungary are among the European countries that have continued to import gas from Russia despite the war.
The Council of the European Union reported that the share of Russian gas imports to the European Union dropped from 40 percent in 2021 to eight percent last year.
Moreover, the European Council reported that Russian exports accounted for less than 15 percent of European gas imports, including pipeline gas and liquefied natural gas.
According to the Oxford Institute for Energy Studies, revenues from Russia’s oil and gas industry account for 20 percent of the GDP annually and 30 to 50 percent of the total federal budget revenues in the last 10 years.
