Russian gas shipments to Europe via Ukraine halted as transit deal expires By Reuters
Written by Vladimir Soldatkin and Dan Peleschuk
MOSCOW/KYIV (Reuters) – Shipments of Russian goods through Soviet-era pipelines through Ukraine to Europe were halted early on New Year’s Day as a transit agreement expired and warring Moscow and Kyiv failed to reach an agreement to resume the flow.
The closure of Russia’s oldest gas route to Europe ends a decade of strained relations stemming from Russia’s 2014 annexation of Crimea. Ukraine stopped buying Russian gas the following year.
“We have stopped the transportation of Russian gas. This is a historic event. Russia is losing its markets, it will lose money. Europe has decided to abandon Russian gas,” said Ukrainian Energy Minister German Galushchenko in a statement.
The cessation of gas flows was expected during the war, which began in February 2022. Ukraine has been adamant that it will not extend the agreement amid military conflicts.
According to an industry source, Gazprom (MCX:) last year took the absence of a gas transit route through Ukraine, accounting for almost half of the total amount of Russian pipelines sent to Europe.
Russia still exports gas through the TurkStream pipeline on the Black Sea bed. TurkStream has two lines – one for the Turkish domestic market and the other serving customers in central Europe including Hungary and Serbia.
The European Union redoubled its efforts to reduce its dependence on Russian energy after the outbreak of military conflict in Ukraine in 2022 by seeking alternative sources.
The remaining buyers of Russian gas through Ukraine such as Slovakia and Austria have also planned additional supplies.
Moldova, which was part of the Soviet Union, is among the worst affected countries. It says it will now need to introduce measures to reduce its gas consumption by a third.
There was no immediate comment from Europe early Wednesday.
A five-year agreement to transport gas between Russia and Ukraine expired at the beginning of Jan. 1.
“Due to the repeated and clear refusal of the Ukrainian side to renew these agreements, Gazprom was deprived of the technical and legal capacity to supply gas to the territory of Ukraine from January 1, 2025,” said Gazprom’s statement. Telegram messaging app.
“As of 08:00 Moscow time (0500 GMT), the supply of Russian gas to the territory of Ukraine is not carried out.”
Ukraine’s energy ministry also said that Russian gas transit through Ukraine was “suspended due to national security”.
Ukraine now faces a loss of about $800 million a year in transit money from Russia, while Gazprom will lose about $5 billion in gas sales.
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Russia and the former Soviet Union spent half a century creating a large share of the European gas market, at its peak around 35%, but the war has destroyed that business for Gazprom.
The Yamal-Europe pipeline through Belarus has also been closed and the Nord Stream route across the Baltic Sea to Germany has been decommissioned in 2022.
Combined, the various routes delivered a record high of 201 billion cubic meters (bcm) to Europe in 2018.
Russia sent about 15 bcm of gas through Ukraine in 2023, down from 65 bcm when the last five-year contract starts in 2020.
