Slovak state-owned gas buyer SPP is continuing negotiations to secure an extension of gas transit through Ukraine after Kyiv's contract with Russian supplier Gazprom expires at the end of the year, and several options are on the table, SPP Chief Executive Vojtech Ferencz said on Thursday.
Ukraine has said it does not want to renew the transit deal but some central European countries rely on Russian gas delivered through pipelines that cross the country, having secured an exemption from a European Union ban on Moscow's gas imports.
SPP has been a leading voice in trying to keep the transit open despite Russia's war with Ukraine, as alternative routes are more costly and it faces potential bottlenecks in other pipelines.
"When I put all the risks together, I believe that the transit should be and must be maintained in order to avoid artificial costs in central Europe,” Ferencz told Reuters on the sidelines of a gas conference in Slovak mountain resort of Horny Smokovec.
“I have the feeling that things will somehow fall into place...in 2019 the transit extension was also signed in December. There are many open options for what can happen.”
Ferencz, fresh from a trip to Baku, confirmed that one option was the potential involvement of Azeri firm SOCAR, which could ship gas through Ukrainian territory and avoid the need for Kyiv to deal with Gazprom (GAZP.MM), but he stressed nothing had been agreed yet.
He said the simplest way of involving SOCAR would be if it handed back the gas to Gazprom on the Ukraine-Slovak border - allowing Gazprom to continue servicing its European customers.
SOCAR did not immediately respond to a request for comment outside of business hours.
Discussions with Kyiv about maintaining the status quo were also continuing, Ferencz added, despite Ukraine's rejection of that scenario.
The transit could also be done under ownership of other intermediaries, including a possible consortium involving SPP, or Gazprom may try to find an alternative delivery route, Ferencz said.
Gazprom could not immediately be reached for comment late on Thursday.
SPP, providing for two thirds of Slovak consumption, takes 3 billion cubic metres of gas per year from Gazprom under a contract lasting until 2034.
A total of 14 billion cubic metres of Russian gas is expected to have flowed through Ukraine this year and any renewed arrangement should maintain these volumes, Ferencz said, as shipping only to Slovakia would raise transit costs too much.
He added that he would also travel to Brussels to discuss European Commission backing for a new arrangement.
Whatever happens, Ferencz said SPP's 14TWh of storage was nearly full and the company had an option for another 3 TWh of gas in storage, along with five alternative supply contracts and two more under negotiation, safely sufficient to cover its customers in the coming heating season.
