Azerbaijan in talks with Russia on Ukraine gas transit: Aliyev

Azerbaijan is in talks with Russia regarding gas transit via Ukraine having been approached by both Kyiv and the EU to help facilitate the potential extension of the Russia-Ukraine deal, President Ilham Aliyev said July 20.

The five-year gas transit deal between Russia and Ukraine is due to expire at the end of 2024, impacting a number of countries that still import Russian gas via Ukraine, with Austria and Slovakia chief among them.

"We've been approached by Ukrainian authorities and the EU to facilitate in prolongation of this contract," Aliyev told delegates at the Global Media Forum in the city of Shusha, Azerbaijan.

"It seems that both sides are interested in that," Aliyev said, according to a transcript of his comments posted to the website of the president's office.

"We are also in the process of negotiations with Russia on this matter. If we can help, we will," he said, adding: "I think that it is possible to prolong this deal."

Aliyev said that without Russian pipeline flows via Ukraine, countries such as Austria and Slovakia "would be in serious trouble."

"Either they will have to pay hundreds of millions more to get gas from other sources or physically they will have no access to additional gas," he said.

Russian gas transit via Ukraine currently amounts to around 42 million cu m/d, or 15 Bcm/year, entering Ukraine at the Sudzha interconnection point on the border with Russia.

Russian gas deliveries to Europe via Ukraine totaled 14.65 Bcm in 2023, a decline of 28% year on year and down 65% versus the same period in 2021.

Ukraine's President Volodymyr Zelensky said earlier this month that Kyiv was in talks on the potential to transit gas from Azerbaijan to Europe to make use of Ukraine's transit system.

"Alternative steps are being considered now on how we can use the pipeline with another gas supplier, another country," Zelensky was quoted as saying in an interview with Bloomberg TV.

Zelensky said the idea for gas from Azerbaijan to be transited to Europe via Ukraine was "one of the proposals" currently being discussed and that talks were being conducted by cabinet officials.

The German government and the European Commission are also said to be in talks with the EU member states that would be affected by a halt in transit via Ukraine.

Slovak Prime Minister Robert Fico said in May that Slovakia wanted to import gas from Azerbaijan shipped via Ukraine and that Ukraine's Prime Minister Denys Shmyhal had said he would support such an agreement.

Russian imports

Aliyev, meanwhile, also described accusations it was reselling Russian gas to Europe as "fake news," defending its decision to purchase 1 Bcm of Russian gas.

"We did contract 1 Bcm of gas from Russia when the prices on international markets were very high, and the price for Russian gas was affordable. This was purely a commercial business case, nothing more than that," he said.

"Being accused of being a kind of a channel for Russian gas exports is absolutely unfair."

Aliyev also said Azerbaijan had halted imports of gas under a swap deal with Turkmenistan and Iran.

"We are not in need of anyone's gas. You probably know, due to certain reasons, the transportation of Turkmen gas to Azerbaijan through Iran has also stopped. So, we don't need it," he said.

Aliyev's comments come as energy relations with Europe continue to develop, with the country expected to supply Europe with some 13 Bcm of gas in 2024, up from 11.8 Bcm in 2023. "We have a growing European market," he said.

Aliyev also pointed to the declaration on strategic partnership signed with the European Commission in July 2022, which set a specific target for supplies of gas from Azerbaijan to Europe in 2027.

"It is not a formal commitment but a target to double the supply of Azerbaijani gas to Europe," he said. "We are moving towards that direction."

Aliyev said that with reference to 2027, the target was for European supply of 16 Bcm/year by the end of 2027, implying it was based on 2021 levels.

The EC in July 2022 said the new memorandum of understanding included a commitment to double the capacity of the Southern Gas Corridor to deliver at least 20 Bcm to the EU annually by 2027.