Azerbaijan transit is one of two alternatives that Ukraine is considering – Naftogaz

Oleksiy Chernyshov, chairman of the Board of Naftogaz of Ukraine, called the proposal with the transit of Azerbaijani gas the main one of the two alternatives that Ukraine is currently considering. The volumes of transportation will be small, but they are important for Ukraine, he told Financial Times.

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The proposal is that Azerbaijan will import gas from Russia and simultaneously export its own gas to Europe through the Ukrainian pipeline.

Russian gas passing through the Ukrainian pipeline now accounts for about 5% of the total supply to the EU.

According to Chernyshov, Azerbaijan could transport only 2 billion cubic meters out of 14 billion cubic meters from this volume.

Another option assumes that traders from the European Union will buy gas at the Ukrainian-Russian border. But Chernyshov believes that this will tie Ukraine to Gazprom more.

"[The] Azeri proposal is more solid because they do have the production of gas which they can channel [to] Europe. Whereas EU traders would be acting as a conduit for Russian gas," Chernyshov said.

According to him, it is worth considering both options for now.

The agreement is unlikely to be reached before the end of this year, Chernyshov noted. Maintaining transit through Ukraine could be crucial to Ukraine's plans to export gas in the future, he said.

In 2019, Gazprom and Naftogaz signed a five-year transit contract, according to which the Ukrainian company is the organizer of gas transportation. Its term expires at the end of 2024 and will not be extended.

On March 4, 2024, Prime Minister Denys Shmyhal said that Ukraine is ready to provide a gas transit service from Russia after the end of the contract, if the EU countries order it. This concerns above all Austria and Slovakia, which import gas from Russia through Ukraine.

In June, Bloomberg reported that European officials are discussing the continuation of gas supplies through Ukraine. In early July, President Volodymyr Zelenskyy said that the agreement to replace Russian gas with Azerbaijani gas is "one of the proposals" currently being discussed.