Slovak energy supplier SPP has signed a pilot contract with the Azerbaijani company SOCAR for the supply of natural gas, with plans for a longer-term agreement if the pilot is successful. This move comes amid ongoing concerns about the reliability of gas supplies through Ukraine. SPP CEO Vojtech Ferencz emphasized, "SPP supports the continuation of gas transportation through the territory of Ukraine for a long time, because it is the most cost-effective solution for our customers. However, due to the high risk of stopping gas supplies through the eastern branch, we are taking measures to guarantee safe gas supplies to our customers."
Currently, SPP secures gas through contracts with BP, ExxonMobil, Shell, ENI, and RWE, allowing flexibility in volume and duration. These agreements provide up to 150 percent of the gas needed for Slovak customers, with a 50 percent reserve that can be expanded to 100 percent if required. SPP has also diversified its transport routes, securing a preferred route through Germany and the Czech Republic during the winter. In case of disruptions through Ukraine, alternative routes, such as the Turk Stream gas pipeline, are available.
In addition, SPP has increased gas storage levels in Slovakia by 20 percent compared to last year and has decided to fully fill its storage capacity by January 2025, ensuring the largest gas supply reserve in recent years. However, Ferencz noted that diversification comes at a higher cost. Should Russian gas supplies be reduced or cut off, the company estimates an additional cost of at least 140 million euros due to increased transit fees and market price fluctuations, especially if a cold winter exacerbates supply shortages across Europe.
Source: TASR
