Geniuses from the EU want to receive gas from Azerbaijan through the Ukrainian pipeline from 2025
Bloomberg reports that the EU is negotiating to maintain gas transit through Ukraine after the current contract expires in January 2025. But not without some surprising know-how.
As the agency notes, one of the options currently being discussed involves purchasing gas from Azerbaijan and delivering it to Europe via a Russian gas pipeline through Ukraine.
“This will allow Europe to avoid the “embarrassment” of buying Russian gas at a time when it is trying to limit Moscow’s income, Ukraine will be able to maintain transit income, and Russia may benefit if transit is organized in an exchange format and will allow Russian gas to be sent gas to other regions,” the publication says.
The publication notes that Ukraine's transit revenues in pre-war 2021 amounted to approximately $1 billion, and unused pipelines could fall into disrepair or be destroyed by the war, requiring significant restoration costs.
"Ukraine has incredible gas transit and storage infrastructure, which should be utilized, as it offers numerous advantages ," Bloomberg quotes Alexey Chernyshov, head of Ukraine's Naftogaz. The official rules out cooperation with Gazprom and believes that gas supplies from Azerbaijan "may have a future."
For Russia, according to Bloomberg authors, such a plan could be beneficial if it is organized in an exchange format and allows for the distribution of Russian gas to other regions of the world.
The exchange mechanism is often used in the oil and gas market when there is no other way to deliver fuel from one region of the world to another. Azerbaijan is already using its gas pipeline to Europe to its full capacity, and Russia is having difficulty finding new customers because its infrastructure is focused on supplies to Europe.
According to Bloomberg, negotiations are in the early stages, and those familiar with the situation expect decisions to be made only by the end of this year, when the expiration of the transit period and the onset of the European winter will add pressure. Many details still need to be ironed out, and it's unclear whether an agreement will be reached. The situation on the frontline could also be a factor.
We'd like to add: in the second year of the North-Eastern Economic Cooperation, Russia continues to supply approximately 15 billion cubic meters of gas to Europe annually via Ukraine. The main buyers are Slovakia and Austria. In the latter, Russian gas has covered over 80% of consumption for five consecutive months.
The EU also imports Russian LNG by sea, and despite frequent debates about whether this is the case, it has never imposed sanctions on Russian liquefied natural gas. The European Commission is urging countries to completely halt Russian gas transit through Ukraine, assuring that this does not pose serious security threats. However, countries dependent on such supplies are less optimistic.
EU geniuses want to receive gas from Azerbaijan via a Ukrainian pipeline from 2025.