Talks are continuing in an effort to keep Russian natural gas flowing across war-torn Ukraine to Europe, despite a Ukrainian military strike on a gas facility in Russia’s Kursk region, according to state-run Naftogaz.
The news raises hopes in Slovakia and Austria that a regional gas supply crisis may be averted in 2025 after a gas transit agreement between Naftogaz and Russia’s Gazprom expires at the end of this year.
Naftogaz’ announcement coincided with a Ukrainian military raid into the Kursk region that is understood to have temporary curtailed Russian access to a key gas pipeline metering station.
The station, located on the Russia-Ukraine border several kilometres from the Russian town of Sudzha, handles all gas flowing from Russia to Europe.
Russia’s defence ministry provided no details on Thursday’s raid but earlier said its troops were battling Ukraine’s offensive in the region.
However, unconfirmed reports on Russian social media allege that Ukraine’s military controls the western part of Sudzha and several nearby settlements, thus restricting Russian access to the metering station.
A Gazprom’s spokesperson told Moscow-based news agency Interfax on Thursday that the company has agreed to ship 37.3 MMcm of gas via Sudzha that day.
The decline may not be related to the incursion; transparency data from Ukraine’s gas pipeline operator suggest a larger than usual share of Russian transit gas has remained in Ukraine since the second half of July.
Though the expiring gas transit agreement between Gazprom and Naftogaz permits a so-called virtual reverse scheme for Gazprom’s remaining European buyers, the Russian gas giant has previously attempted to block attempts to use it.
Under the scheme, European customers may opt to re-sell Russian gas still in transit to customers in Ukraine, or forward it directly to one of the country’s underground storage facilities.
Chernyshov has acknowledged that Gazprom’s transit payments have been instrumental in covering the estimated $1 billion annual cost of running Ukraine’s vast gas trunkline pipeline network.
“If gas transit flows halt, then somebody has to provide such financing,” he said.
According to Chernyshov, Naftogaz is still in talks to enable Azerbaijan’s state-run Socar to act as a middleman in securing gas transit shipments across Ukraine to Slovakia, Czechia, Austria, Italy and Moldova from January 2025.
Although industry analysts have repeatedly indicated that Azerbaijan has no spare gas producing capacity, Chernyshov said that the continuation of Russian gas transit across Ukraine may be arranged by swap agreements.
Along with Russia and Azerbaijan, such swaps would require the participation of Turkey, which is currently receiving Russian gas via two subsea pipelines across the Black Sea, Blue Stream and Turkstream, according to Ilham Shaban, a partner in Baku-based consultancy Caspian Barrel.
Turkey also handles transit flows of Azeri gas from western-led Caspian Sea developments.
However, Turkey will likely need some cost-recovery guarantees from the European Union for running such complex swap arrangements, Shaban suggested, adding that his pessimism has grown following this week’s Ukrainian incursion that all sides can agree on gas swap and transit terms.
