Slovakia's PM Fico admits problems negotiating Azerbaijan gas swap deal

Slovakia's Prime Minister Robert Fico on March 20 stressed the importance of resuming the transit of Russian gas through Ukraine after admitting problems negotiating a swap deal under which non-Russian gas from Azerbaijan would be shipped instead.

An Azerbaijan-Russia gas swap arrangement was one of the options Slovakia put forward for continuing gas transit through Ukraine before Kyiv suspended flows through the country on Jan. 1.

Slovakia has since taken the lead in trying to resume gas transit through Ukraine, recruiting the mediation of the European Commission and sometimes threatening Ukraine with retaliatory measures.

"We are negotiating with Azerbaijan. We continue to push for a swap operation but are facing all sorts of technical problems," Fico told a meeting of the Slovak parliament's European Affairs Committee before a meeting of EU leaders in Brussels.

"That is why we believe that peace talks open the way for standard gas transit through Ukraine without any speculation and complications," he said.

Fico told the committee meeting that "without Russian [gas] Europe simply cannot compete."

He also said the EC should drop its plans for a road map to become independent of Russian gas. "It should be clear that western Europe cannot function without gas from the east," he said.

Increased costs

Slovakia and other countries in the region are now paying around 10% more for gas due to the shutdown of transit through Ukraine, Fico said. "These are the results of political decisions that we cannot support," he added.

Fico blames the ending of Ukrainian gas transit for the sharp rises in European gas prices at the start of the year and their continued relatively high levels.

Platts, part of S&P Global Commodity Insights, assessed the benchmark Dutch TTF month-ahead price on March 20 at Eur42.72/MWh.

Fico warned that EC moves to try to cut energy prices by removing administrative burdens would not deliver fast or effective results, comparing European gas prices with those much lower in the US.

He also warned that Slovakia would not automatically back the continued reinforcement of EU sanctions against Russia especially if these appear to threaten tentative moves towards peace.

"[EU] sanctions have had almost no everyday impact on life in Russia," Fico said.

He added that a further extension of EU sanctions could affect civil nuclear technology and impact Slovakia's nuclear power sector.

Slovak utility Slovenske Elektrarne operates five Soviet-era designed VVER 440/213 reactors that still use Russia-produced nuclear fuel.

Nuclear power accounts for around two-thirds of Slovakia's electricity production, and the country is a net exporter to neighboring countries.