Ukraine mulls Azerbaijani gas transit deal to boost EU energy security

Ukraine mulls Azerbaijani gas transit deal to boost EU energy security – Zelenskiy

6 July, 10:01

Ukrainian President Volodymyr Zelenskiy has said that negotiations are underway over transportation of Azerbaijani gas to the European Union starting in 2025 in a bid to bolster Kyiv’s role as a transit state to secure Europe’s energy security.

Zelenskiy mentioned that the deal to replace Russian gas with Azerbaijani gas is one of the proposals currently being discussed. "Government officials are working on this right now."

Ukraine is in charge of gas transportation to the EU, as the country wants to maintain its role as a transit state and help its Western neighbors ensure energy security, Zelenskiy said in a Bloomberg television interview. In his words, a deal to replace Russian gas with Azerbaijani gas is one of the proposals that is currently being discussed. “Now government officials are doing this,” Zelensky said.

Negotiations are underway to ensure the continuation of natural gas transit through Ukraine, even as Russia seeks to cut off European supplies. Caspian gas currently flows to Europe via Russia and Ukraine, and Germany’s Economics Minister, Robert Habeck, has confirmed these discussions. The goal is to find a way to transport Caspian gas without benefiting the Russian budget.

Numerous meetings between Azerbaijani energy company SOCAR’s head, Rovshan Najaf, and Gazprom’s CEO, Alexey Miller, this past spring and summer, suggest that extending gas transit through Ukraine is being considered. In early May, the head of SOCAR also met with Naftogaz’s CEO, Alexei Chernyshev.

Although Azerbaijan itself has limited gas reserves, the possibility of gas swaps is being discussed. In 2023, 12 billion cubic meters of Caspian gas were delivered to Europe, a figure lower than the volumes typically transported through Ukraine. Last year, Gazprom transported 14 billion cubic meters through Ukraine, generating over $800 million in transit fees.

Despite the ongoing tensions, Slovakia, Austria, Italy, and the Czech Republic continue to receive Russian gas via Ukraine. Gazprom’s market share in Slovakia is over 50%, and in Austria, it’s as high as 80%.