Czech Republic Seeks to Diversify Energy Sources with Azerbaijani Gas Imports

The Czech Republic is keen on importing gas from Azerbaijan to complement its existing crude oil purchases from the resource-rich South Caucasus nation. 

Petr Binhack, director for Energy Strategy and International Cooperation at the Czech Ministry of Industry and Trade, stated that Prague’s effort to secure new energy import markets aims to reduce dependence on Russian imports.

“The Czech Republic is 100 percent dependent on Russian gas and 50 percent dependent on its oil. Therefore, we intend to establish close cooperation with Azerbaijan in the energy sector to ensure our energy security,” Binhack said at the “Gas Dialogue: The Role of Gas Supply During the Energy Crisis” forum held within the 29th Baku Energy Forum in Baku on Thursday.

By 2022, Russia was the exclusive supplier of oil and gas to the Czech Republic. However, the country’s leadership has implemented a new strategy to reduce Russia’s dominance in the domestic energy market. During the first 10 months of 2023, the Czech Republic virtually managed without Russian gas, with supplies accounting for only 2 percent of total imports during that period.

The situation changed dramatically in December last year when Russian gas again constituted most of the country’s gas supplies, standing at 60 percent of overall imports. Starting in January 2024, the Czech Republic reportedly increased its gas imports from Russia, which accounted for 62 percent of the total natural gas volume supplied to the country.

In May this year, Germany and the Czech Republic called on the European Union to conduct regular high-level discussions on completely ending imports of Russian energy into European markets. This initiative by Berlin and Prague is one of several efforts by the EU to navigate the lack of unanimous support among member states for a total ban on Russian gas imports. The EU has already prohibited imports of Russian coal and sea-borne crude oil, with certain exemptions for some landlocked nations.

Prague’s main objective is to replace Russian imports with alternative sources, including from Azerbaijan. 

“We aim to diversify our gas supply and plan to import natural gas from Azerbaijan. Azerbaijan plays a significant role in Europe’s energy supply with its infrastructure projects and oil-gas potential. According to forecasts, natural gas will remain the primary energy source in Europe until 2050, and therefore, investments and infrastructure related to natural gas will continue to be developed,” Binhack stated.

The annual demand for natural gas in the Czech Republic stands at 7.5 billion cubic meters (bcm). Gas currently contributes nearly five percent of electricity production in the country, and it is anticipated that around 10 percent of electricity will be derived from natural gas by 2035.

The volume of Azerbaijani gas imports targeted by Czech authorities is reportedly estimated at one billion cubic meters, totaling over 13 percent of Czech domestic demand. Azerbaijan has been supplying crude oil to the Czech Republic, and in 2023, oil supplies from Azerbaijan covered more than 25 percent of the landlocked country’s demand for this fossil fuel. Azerbaijan accounts for 85 percent of the Czech Republic’s trade turnover with the South Caucasus.