In an interview with Bloomberg Television, President Volodymyr Zelenskyy said that discussions overseen by Ukrainian government officials aim to potentially replace Russian gas with supplies from Azerbaijan.

The initiative comes as Europe continues efforts to reduce its dependence on Russian gas amid ongoing geopolitical tensions following Moscow’s invasion of Ukraine.

The current transit agreement for Russian gas through Ukraine is set to expire by the end of 2024, raising concerns about potential disruptions in supplies.

“Alternative steps are being considered now on how we can use the pipeline with another gas supplier, another country. Negotiations are underway,” Zelenskyy said. “We don’t want to extend the gas contract with the Russian Federation. We don’t want them making money here.”

Using Ukraine’s extensive pipeline network for transporting Azerbaijani gas could provide critical economic support for Kyiv, which has suffered major economic challenges due to the ongoing conflict.

Ukrainian transit revenues from gas amounted to some $1 billion in 2021, underscoring the financial significance of the negotiations now underway.

However, using Ukrainian pipelines poses security risks, with concerns that the infrastructure could become a military target and suffer costly damage, disrupting energy supplies to Europe.

Gas for Europe

Once a major conduit for Russian natural gas to Europe, Ukraine’s transit role has diminished over time due to alternative routes developed by Russia. Despite this, Ukraine still plays a crucial role in shipping approximately 15 billion cubic meters of gas annually to countries like Slovakia and Austria.

Azerbaijan, for its part, has expressed ambitions to increase its gas exports to Europe but faces challenges in securing sufficient long-term agreements to support expanded production capacity.

Following Zelenskyy’s comments, European benchmark gas prices crept down, extending the day's losses below €33 per megawatt-hour.