European officials are in talks to keep gas flowing through a key Russia-Ukraine pipeline, as they race to prevent Moscow’s war further damaging the continent’s energy supplies.
Europe has tried to wean itself off Russian gas but several eastern European states continue to receive it through a pipeline that crosses Ukraine. The agreement that covers this transit arrangement expires at the end of this year. And with war raging, most market watchers expect the gas to finally come to a halt.
But European government and company officials are talking to counterparts in Ukraine about how to keep the gas flowing next year, according to people familiar with the matter who declined to be named as the talks are private. One option that’s been discussed is for European companies to buy and inject gas from Azerbaijan into Russian pipelines heading to Europe, according to some of the people. Such an arrangement would allow Europe to avoid the embarrassment of buying Russian gas at a time when it’s trying to crimp Moscow’s revenues.
The idea is gaining momentum as it becomes clear that Ukraine would be in favor. Transit revenue amounted to about $1 billion in 2021 — providing crucial funding for the war-ravaged economy. There are also concerns that disused pipelines could become military targets, or fall into disrepair that’s costly to reverse.
“There are two factors we should always remember,” Oleksiy Chernyshov, chief executive of Ukraine’s state-run Naftogaz, told Bloomberg News on Monday. “One is that Ukraine has incredible infrastructure of transit and storage gas, which should be used, and Ukraine is predisposed to use this infrastructure because it brings a lot of advantages.”
He ruled out any plan that involved working with Russia’s Gazprom PJSC, and said bringing gas from Azerbaijan “might have some future.”
