SPP Concludes Contract for Supplies of Azerbaijani Gas

Bratislava, November 13 (TASR) - State-owned gas utility SPP has concluded a short-term pilot contract for supplies of gas from an Azerbaijani company called SOCAR, SPP reported on Wednesday. The gas utility is set to consider a long-term contract with SOCAR when the pilot agreement has been completed and evaluated, said SPP spokesman Ondrej Sebesta. "SPP has long supported the continuation of gas transportation via Ukraine, as it is the most cost-effective solution for our customers. However, due to the high risk of gas-supply stoppages via the eastern branch, we're taking measures to guarantee safe gas supplies to our customers, from large industrial consumers to households, in any situation," said SPP general manager Vojtech Ferencz. Currently, SPP has standard diversification commercial contracts for purchasing gas from non-Russian sources with BP, ExxonMobil, Shell, ENI and RWE. These contracts are flexible both in terms of volume and time. If supplies via the Ukrainian pipeline are stopped, Slovakia has diversified transport routes, and there is an option to transport gas via each of the neighbouring countries. The preferred alternative transport route for SPP during the winter season is the pipeline from Germany via the Czech Republic. In the event of a definitive supply shortfall via Ukraine, the southern transport route via the Turk Stream pipeline via Turkey, Bulgaria, Serbia and Hungary could also be important. This route could provide Slovakia with part of the volumes of Russian and Azerbaijani gas. Since the beginning of the process of seeking alternative supplies, SPP has warned that diversification comes at a price, and in the event that Russian gas flows only partially to Slovakia or stops flowing altogether, any other alternative will be significantly more expensive. If the company loses access to Russian supplies and has to purchase the entire necessary volume of gas from another source and physically transport it to Slovakia, it would cost it at least €140 million extra. zel/df