Slovakia's main gas importer, SPP (Slovenský Plynárenský Priemysel), recently denied an October 31 report suggesting that Slovakia and Hungary were close to finalizing a deal to receive gas from Azerbaijan through Ukraine. According to this report, the supply, estimated at between 12 and 14 billion cubic meters per year, was to be managed by the Azerbaijani state company Socar, with the participation of transporters SPP and MVM, a Hungarian energy company. However, an SPP spokesperson said on November 1 that reports of the supposed deal were unfounded.
SPP, a historic player in supporting gas transit via Ukraine, specified that it regularly discusses energy issues with its partners. However, the idea that a supply contract involving the Slovak company was about to be signed has been described as false. Neither MVM nor Socar, the companies supposedly involved, have commented on the information.
Context and Dependence of Slovakia on Russian Gas
Slovakia remains dependent on Russian gas, imported mainly via Ukraine, although it has taken steps to diversify its sources of supply. As such, connections have been established with neighboring countries such as Hungary and Poland, and reverse flow capabilities have been strengthened via the Czech Republic and Austria. The diversification of these routes aims to secure supply, while the gas transit agreement between Russia and Ukraine, in place for five years, is due to expire at the end of 2024. If no new arrangement is found, the Russian gas flows to Slovakia could be interrupted.
Slovakia also receives revenue as a transit state for Russian gas, transported via Ukraine onward to Austria. This gas transit remains crucial for the country's economy.
Ongoing Regional Declarations and Negotiations
Last May, SPP raised the feasibility of creating a European consortium to guarantee gas delivery to the Russian-Ukrainian border. This initiative would help secure Russian gas supplies through Ukraine even after 2024. At the same time, Azerbaijan has also initiated discussions with Russia and Ukraine to explore the possibility of maintaining gas transit through the territory Ukrainian.
Azerbaijani President Ilham Aliyev said in September that he remained optimistic about progress in those talks. At the same time, Naftogaz, the Ukrainian state-owned gas company, also held talks with Socar regarding the potential transit and storage of Azerbaijani gas in Ukraine. According to Oleksiy Chernyshov, CEO of Naftogaz, two scenarios are possible: a total interruption of flows or the establishment of a model with alternative suppliers to guarantee the distribution of gas to European customers.
Prerequisites and Perspectives
Chernyshov added that a necessary condition for this cooperation would be the use of storage facilities in Ukraine for Azerbaijani gas. However, ongoing tensions between Ukraine and Russia over the transit issue complicate the outlook. Indeed, Ukrainian Prime Minister Denys Shmyhal affirmed in early October that Kyiv would not extend the transit agreement with Moscow when it expires.
Despite this, Slovakia is working to push for new arrangements to allow Russian gas to continue transiting through Ukraine. According to Shmyhal, his government understands the acute dependence of certain countries, including Slovakia, on this resource, but hopes for a gradual diversification of their supplies. The end of the current agreement and the resulting uncertainty raises questions about the region's energy future and the ability of different players to secure viable alternatives for their consumers.
