European Union nations on Monday will discuss preparations for the winter with Ukraine having signaled it has no intention to renew a five-year pipeline transit agreement to supply natural gas to EU countries when it expires on December 31, 2024.

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Earlier, the EU warned member countries to prepare for a world without Russian gas, with Ukraine gas amounting to 5% of total EU gas imports. Austria, Hungary and Slovakia are likely to be the hardest hit when the imports are cut off; thankfully, they have been finding alternative sources. Two weeks ago, Azerbaijan’s state oil company, SOCAR, started supplying natural gas to Slovakia’s Slovenský plynárenský priemysel (SPP), the country’s largest state-owned energy operator. This came just a month after SPP signed a short-term pilot contract to buy natural gas from Azerbaijan as it prepares for a possible halt to Russian supplies via Ukraine. Hungary and Bulgaria have continued receiving Russian gas as member states found technical solutions to pay Gazprom despite sanctions on Gazprombank. Meanwhile, other European nations have found alternative sources. For instance, major German utilities signed LNG deals with the UAE’s ADNOC.

Meanwhile, Turkey has said it is prepared to significantly increase natural gas exports to the European Union, desperate to further wean itself off Russian gas, but it won’t be easy or cheap: In order to do that, the most likely route is to re-export Azeri natural gas from Turkey. That, in turn, would require Turkey to take in more Russian gas to make up for the shortfall. Ankara is keen to play the role of savior and boost its leverage with respect to Brussels; but it wants some demand guarantees before it starts spending on the necessary infrastructure.

By Alex Kimani for Oilprice.com

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