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18 Mar, 2024 09:56

Ukraine won’t extend Russian gas transit deal – official   

The current contract between Moscow and Kiev expires in 2024 
Ukraine won’t extend Russian gas transit deal – official   

Kiev has no plans to prolong gas transit to the EU from Russia when the current contract expires this year, Ukrainian Energy Minister German Galushchenko said on Sunday.

Brokered by the EU, the five-year deal, signed in 2019, provides for Russian energy giant Gazprom 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 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 one of the last remaining routes for Russian gas to flow to the EU will close, 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, however, 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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