Fico refuses to pay more for non-Russian gas. Transit must continue, we have big revenues from it, he said

It also reacted to Prime Minister Robert Fico's statements before the summit of European leaders, who refused to pay more for gas other than Russian gas.

At the end of this year, the transit agreement between Ukraine's Naftogaz and Russia's Gazprom will expire, which will directly affect gas supplies to Slovakia, Euractiv writes.

Commissioner Simson stressed that member states, including Slovakia, have had enough time to prepare for this scenario. "The European Union can function without Russian gas, there are no excuses," she said after the EU Energy Council meeting on Tuesday 15 October.

State interests come first

Fico presented the government's position to the Parliamentary Committee on European Affairs. He firmly rejected the idea that Slovakia would lose its transit role after the termination of the Russian gas supply contract with Ukraine.

"We take large fees for transit and we have large revenues from it. It is our duty as a member state to ensure that transit continues. Whether it is gas or oil," he explained.

If we were to take oil "via the Adriatic", the fees would be five times higher, he said.

The Slovak Gas Company (SPP), Slovakia's largest gas supplier, confirmed that it has enough gas for the winter season regardless of supplies from Russia. SPP also points out that transport via alternative routes will increase transport costs.

"Security of supply comes at a price. The market determines the price of the commodity, but transporting it to Slovakia after the transit via Ukraine is over will bring additional costs," SPP CEO Vojtech Ferencz explained to the Euractiv web portal.

Trading with a war aggressor

The Commissioner also pointed to the political and moral implications of Russian energy supplies. "The cost of Russian gas is not just financial. They are also in the number of lives lost in Ukraine," Simson stressed. She was referring to countries that continue to negotiate with Moscow to maintain transit after the deal ends.

The president of the Slovak Gas and Oil Association (SPNZ), Rastislav Nukovic, warned that Slovakia should look for temporary solutions in this matter. Any new agreements could mitigate the economic consequences, he said.

"For Slovakia, gas from the east is the most economically advantageous because we are at the beginning of the chain," he said at a recent gas conference.

Euractiv recalled that although the prime minister points to high revenues from gas transit, profitability has fallen sharply in recent years, linked to a drop in volumes of fuel transported

After the outbreak of war in Ukraine in 2022, profits fell to 264 million, and last year the Slovak gas transporter, Eurstream, reported a loss of 12.5 million euros.

Ukraine to end deal with Russia

Ukrainian Prime Minister Denys Shmyhal confirmed definitively in early October that Ukraine will not continue its transit agreement with Russia after it expires. "Our strategic goal is to impose sanctions on Russian infrastructure and deprive the Kremlin of resources to finance the war," Shmyhal said.

At the same time, the Ukrainian prime minister acknowledged that the situation may cause problems for some countries and urged them to diversify their energy sources.

Several scenarios are in play

According to Ňuković, the simplest solution to the situation for Slovakia would be to extend the existing contracts, but this is unlikely given the official statements.

Another option is to conclude an agreement with Azerbaijan's SOCAR, which could replace Gazprom. Replacing Ukraine's Naftogaz with a consortium of strong European firms interested in continuing transit could also be a suitable alternative.

"History teaches us that these big deals are made at the last minute," the SPNZ president said, referring to a similar situation in 2019, when Naftogaz signed a deal with Gazprom on Christmas Day and Eustream entered into a cooperation with the Ukrainian carrier during New Year's Eve at Brussels airport.

Watch the archive report on the negotiations between the Slovak and Ukrainian governments on 7 October 2024: