The Slovak SPP has signed a pilot contract for the supply of natural gas with the Azerbaijani SOCAR.
"Following a successful assessment of the cooperation, the company will consider the possibility of entering into a longer-term gas supply contract," the Slovak company stated on its website on Wednesday.
"SPP supports the continued transportation of gas through Ukraine for an extended period, as it is the most cost-effective solution for our customers. However, due to the high risk of gas supply disruptions on the eastern route, we are taking measures to ensure secure gas deliveries to our consumers, ranging from large industrial clients to households, in any situation," noted Wojtech Ferenc, Chairman of the Board and CEO of SPP.
As commented by the company, in the event of a complete halt of gas supplies through Ukraine, SPP will take additional measures to ensure supply security for the remainder of 2025 and subsequent years.
SPP explained that diversification comes at a cost, and if Russian gas were to enter Slovakia only partially or cease entirely, any alternative would be significantly more expensive. If the company lost Russian supplies and had to purchase the entire necessary volume from another source, physically transporting it to Slovakia would cost at least EUR 140 million more.
The difference is primarily attributed to transit fees, which are likely to increase by 2025, with the final amount still unknown. Additionally, the cessation of natural gas supplies through Ukraine would lead to rising prices in wholesale markets. Furthermore, in the event of a cold winter, such a situation could result in gas shortages and supply issues across Europe.