Hungary, Slovakia near agreement with Azerbaijan on gas transit via Ukraine

Hungary and Slovakia are close to signing a contract with Azerbaijan for the annual import of 12–14 billion cubic meters of gas. The new agreement is expected to replace the current transit deal between Russia and Ukraine, which expires at the end of the year, according to Bloomberg sources.

Since Azerbaijan lacks the infrastructure to supply the entire gas volume directly to Europe, the arrangement will involve Russia.

Under the deal, Azerbaijan will supply gas to Russia, which will then transfer an equivalent volume of Russian gas at the Ukrainian border (at Sudzha). This gas will then be transported through Ukraine's gas transmission system to European consumers.

The gas supply from Azerbaijan will be managed by SOCAR, while Hungary's MVM and Slovakia's SPP will handle transport to Europe.

This agreement allows Ukraine to continue receiving transit payments (estimated at around $800 million annually), and Azerbaijan to strengthen its energy ties with Europe.

Political support from Ukrainian authorities is required for the deal's implementation.

European gas prices fell by 8% as news of progress in the negotiations emerged.