Europe receives good news about gas, prices drop "skyrocketing" before winter, can forget about pipeline from Russia to Ukraine

The agreement on the transit of Russian gas through Ukraine expires at the end of this year and is unlikely to be extended. Against this backdrop, companies from Hungary and Slovakia are about to sign contracts to buy 12-14 billion cubic meters of gas per year from Azerbaijan.

A gas storage facility in Bierwang, Germany. (Source: AFP)

The new gas contract will use the existing gas pipeline network to bring Russian gas through Ukraine to the European Union (EU).

New gas supplies from Azerbaijan will effectively replace Moscow's gas shipments that Europe currently receives under the transit agreement via Kiev.

Bloomberg news agency revealed that the new contract will need to be implemented under a swap agreement between Azerbaijan and Russia because Baku does not have enough export capacity to replace existing supplies.

European gas prices for December fell as much as 8.1% after news of progress in negotiations to buy Baku gas.

"The deal, which is still under negotiation, could help stabilize gas prices after recent market volatility," Bloomberg wrote.

For Azerbaijan, the gas supply deal also strengthens the country's energy ties with Europe.

The country supplies gas to eight European countries through a pipeline that runs through Türkiye.

However, previously, the European Commission (EC) affirmed that the region's energy security would not be threatened by the termination of the gas transit agreement between two countries that are conducting a special military campaign.

Slovakia and Austria are among the European countries that continue to import Russian gas via pipelines passing through Ukraine.

Under the deal being negotiated, Azerbaijan's state energy company Socar will supply gas to the Sudzha facility on the Russia-Ukraine border.

Then the Hungarian companies MVM Zrt and Slovakia's Slovensky Plynarensky Priemysel AS will take over and deliver the gas to Europe.

According to Bloomberg news agency: "Any trade deal would require political consensus from Ukrainian officials so that the operator of the country's gas pipeline network can determine its operations."

Before Russia's special military operation in Ukraine began in February 2022, Gazprom - the Russian gas giant - supplied Europe with more than a third of the bloc's gas consumption.

However, when the conflict began, the EU diversified its energy supplies.

The EU currently has a variety of sources, namely Norway, North Africa, Azerbaijan and liquefied natural gas (LNG) from the global market.

Source: https://baoquocte.vn/chau-au-don-tin-vui-ve-khi-dot-giam-vu-vu-truoc-mua-dong-co-the-quen-duong-ong-tu-nga-qua-ukraine-292372.html