These alternatives all come at a price, whether that be more expensive LNG or, in Hungary’s case, reliance on a single pipeline. Either way, though, the gas will keep flowing.
While the closure would be felt most acutely in Central and Eastern Europe, the entire EU could feel “ripple effects,” Gross said. As existing gas infrastructure is run harder, markets will get tighter, with less room for error if there are supply issues.
The Ukraine pipeline may also continue to pump gas. While Kyiv has refused to negotiate a renewal directly with Moscow, talks are underway with fossil fuel-rich Azerbaijan to take over the contracts.
However, questions remain as to whether Azerbaijan can produce sufficient gas to replace all former Russian exports — or whether it would merely serve as a middleman, rebranding “Russian gas” as “Azeri gas” before sending it on through the Ukraine pipeline.
“It’s highly unlikely that any gas sold as gas originating in Azerbaijan will in fact be of Azeri origin,” said Aura Săbăduș, a gas markets expert at commodities intelligence giant ICIS. “Azerbaijan doesn’t have the production capacity to meet demand in Southern, Central and Eastern Europe and is unlikely to be allowed by Russia to use its pipeline network to transit the gas.”
Still, even in that scenario, prices would likely rise slightly.
And, of course, Russia would profit.
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