The current contract between Moscow and Kiev expires in 2024
FILE PHOTO: Ukraine’s Energy Minister German Galushchenko. © Kenzo TRIBOUILLARD / AFP
Kiev has no plans to prolong the current contract with Russia on gas transit to the EU when it expires this year, Ukrainian Energy Minister German Galushchenko said on Sunday.
Brokered by the EU, the current five-year deal was signed in 2019. Under the agreement, Russian energy giant Gazprom agreed to transit 65 billion cubic meters (bcm) of gas through Ukraine in 2020, and 40 bcm annually between 2021 and 2024.
“I can confirm that we have no plans to enter into any additional agreements or extend this [current] agreement,” Galushchenko said.
A stress test of Ukraine’s gas transmission system has proved it “can function without transit,” the official claimed. Kiev is boosting its energy security and independence by increasing domestic gas production, Galushchenko added.
The decision to dump the gas transit deal would mean that Russian gas flows to the EU through one of the last remaining routes will stop, depriving Ukraine of billions of dollars in fees.
Prior to March 2022, the EU received most of its natural gas from Russia through Ukraine’s pipeline network. However, sanctions against Moscow and the sabotage of the Nord Stream pipeline led to a dramatic reduction in supplies and frenzied stockpiling in the EU in 2022.
EU Energy Commissioner Kadri Simson said in February the bloc has “no interest to prolong the trilateral gas transit agreement with Russia” as the bloc plans to completely phase out energy imports from Russia by 2027.
Russian gas is still being transported to the bloc, even though transit flows have been less than 40% of the contracted volume since 2022. Countries such as Austria, Slovakia, and the Czech Republic remain heavily dependent on imports from Russia through Ukraine.
Moscow would use alternative routes and sea-borne deliveries of liquefied natural gas (LNG) if Ukraine scraps the pipeline deal, Deputy Prime Minister Alexander Novak said in January. He noted that Russia is ready to hold talks with the EU on alternative options for natural gas supplies.
Bloomberg wrote in January that even without a new deal, Gazprom could maintain supplies to willing EU buyers by booking short-term capacity in Ukraine via capacity auctions.
Ukrainian Prime Minister Denis Shmigal announced earlier this month that Kiev would continue the transit of Russian natural gas through its territory to Western Europe after 2024 only if EU countries ask it to do so.
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