Slovakia’s PM Urges, Threatens EU To Restart Ukraine Gas Deal

Slovakia’s Prime Minister Robert Fico has revealed that he’s not ruling out the resumption of gas through Ukraine following the expiration of a 5-year transit deal between Moscow and Kyiv. Fico has been pushing President Volodymyr Zelenskiy to restart the transit, citing higher energy costs for Slovakia and the whole region. 

‘‘The pipeline that runs through Slovakia has a capacity of 100 billion cubic meters,” Fico told reporters in Brussels on Thursday. “I want to do everything to ensure it is used in the future,’’ he added.

Europe’s vast natural gas inventories are currently depleting at the fastest clip since 2018 as cold weather ramps up heating needs. According to Gas Infrastructure Europe data, storage is just over 70% full compared with about 86% a year ago. Gas inventories currently are 25% below last year’s peak, marking the biggest drop in seven years. However, Slovakia has already secured alternative gas supplies. On December 1, Azerbaijan’s state oil company, SOCAR, started supplying natural gas to Slovakia’s Slovenský plynárenský priemysel (SPP), the country’s largest state-owned energy operator. This comes just a month after SPP signed a short-term pilot contract to buy natural gas from Azerbaijan as it prepares for a possible halt to Russian supplies via Ukraine.

Not surprisingly, Moscow is open to another gas deal with Ukraine. Back in November, Russia said it was willing to continue supplying gas to Europe via Ukraine if Kyiv and the involved European countries could come to an agreement.

"Of course, in my opinion, the European countries that currently receive gas through this corridor are interested in continuing such cooperation,"  Russian Deputy Prime Minister Alexander Novak, who is in charge of Russia's energy policy, told reporters "We are ready to supply (gas), but not much depends on us, so probably this should be negotiated directly between the users and the country through which the transit is provided."

Ukraine is set to lose up to $1 billion a year in transit fees from Russia-- which it hopes to offset by quadrupling its domestic gas transmission tariffs for consumers--while Gazprom will lose close to $5 billion in gas sales. Ukraine gas amounted to 5% of total EU gas imports.

By Alex Kimani for Oilprice.com

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