SOCAR sources: Russia and Ukraine cannot agree on gas deal mediated by Azerbaijan

Azeri SOCAR, a leading energy company in Azerbaijan, said on Friday that Moscow and Kyiv failed to reach an agreement on the deal brokered by Azerbaijan for Russian gas to be exported to Europe via Ukraine.

Azerbaijan was asked by the European Union and Ukraine to facilitate talks with Russia regarding a gas-transit deal due to expire this year.

On Thursday, Russian President Vladimir Putin stated that there was no chance of a new agreement with Kyiv for the transit of Russian gas to Europe through Ukraine.

Ukraine, which has been fighting Russia's invasion in Europe since February 2022 said that it would not renew a contract, under which nearly 15 billion cubic meters (bcms) of Russian natural gas is sent to Europe every year. This compares with the 150 billion cubic metres of gas piped through Ukraine during 2022.

Volodymyr Zelenskiy, the president of Ukraine, said on Thursday that Kyiv would consider continuing transit of Russian Gas if Moscow didn't receive payment before after the war. This was a condition Moscow wasn't likely to accept.

Interfax-Ukraine reported that Ukrainian PM Denys shmyhal stated the transit agreement will expire in the morning of January 1. He said that transit would only be resumed for non-Russian natural gas if the European Commission requested it.

SOCAR's source stated that SOCAR has been mediating negotiations between Ukrainian energy companies and Russian energy firms for nearly a year at the request of Ukraine as well as the European Union.

He added that senior managers met with senior representatives from Ukrainian energy companies in Istanbul on May 2, and in Vienna on August 29, and that "in the end, both sides were unable to agree on terms."

SOCAR, Russian energy giant Gazprom, and Ukraine's Naftogaz state-run company did not respond to requests for comment. (Reporting from Nailia Bagirova, in Baku; additional reporting by Olena Hartmash in Kyiv. Writing by Vladimir Soldatkin. Editing by Kevin Liffey.)

(source: Reuters)