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Slovakia's SPP signs pilot deal for Azerbaijani gas
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Slovakia's SPP signs pilot deal for Azerbaijani gas
Nov 13, 2024 11:26 AM

Nov 13 (Reuters) - Slovakia's main gas buyer SPP has

signed a short-term pilot contract to buy natural gas from

Azerbaijan and will consider a longer-term deal as it prepares

for a possible halt to Russian supplies via Ukraine, it said on

Wednesday.

A deal between Moscow and Kyiv on Russian gas exports

through Ukraine to Europe expires at the end of the year,

forcing SPP and others in the European Union to search for

alternative sources, including Azerbaijan.

Russia has said it is willing to continue to supply gas

through Ukraine despite the war with its neighbour, while Kyiv

has refused to engage in discussions with Moscow on gas exports.

In SPP's trial deal with SOCAR of Azerbaijan, it will

purchase supply in December. Delivery will come to Austria, it

said, without giving more details.

A source with knowledge of the deal said small volumes of

Azerbaijani gas will be shipped via the Trans Balkan pipeline in

Bulgaria.

SPP has been a leading voice in trying to keep transit open

through Ukraine but has also sought to diversify its supply.

It said it had diversified gas purchase contracts with BP

, Exxon Mobil ( XOM ), Shell, Eni and

RWE, and has up to 150% of its customers' consumption

volume available as a cushion. It said that could rise.

"Due to the high risk of stopping gas supplies via the

eastern pipeline, we are taking measures to guarantee safe gas

supplies to our customers, from large industrial customers to

households, in any situation," SPP CEO Vojtech Ferencz said.

SPP said Slovakia also had diversified transit routes for

supplies in case of a stoppage via the pipeline running through

Ukraine. That includes a pipeline from Germany running through

the Czech Republic.

It said a southern transit route through the Turk Stream

pipeline across the Black Sea via Turkey and then Bulgaria,

Serbia and Hungary would be important if Ukraine transit stops,

and part of its Russian or Azerbaijani gas could travel via that

pipeline.

It added it would take more measures for supply security if

flows via Ukraine were stopped, but that these would be more

expensive.

"If the company were to lose Russian deliveries and purchase

the entire necessary volume from another source and physically

transit it to Slovakia, it would cost it at least 140 million

euros ($148.6 million) more," SPP said.

($1 = 0.9424 euros)

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