The transit of pipeline gas from Russia to Europe through Ukraine could cease next year as the existing contract between Moscow and Kyiv nears expiration, warns the Ukrainian energy minister, German Galushchenko, in an interview with the FT.
Prospects of both sides reaching a new agreement are minimal, leaving gas flow in jeopardy and terminating Ukraine’s transit fee revenue and gas supply to nations like Austria and Slovakia. Galushchenko expressed doubts about bilateral negotiations, stating, “I can tell you that we are preparing our system for a cut of supplies.”
Previously accounting for approximately 5% of Russian gas exports to Europe, the Ukrainian route became vital after other routes were shut down by Gazprom last year. May data cited by the FT reveals that the gas flowing through Ukraine supplies about half of Austria’s gas and up to 95% of Slovakia’s gas imports.
While the Ukrainian energy minister suggested EU intervention in contract extension talks with Moscow, analysts expressed concerns about the optics of negotiating with Russia.
The EU heavily relies on natural gas imports, with Gazprom previously supplying about half of its total needs. However, the share of Russian gas in the EU import mix has significantly decreased due to geopolitical tensions. Currently, only two routes remain open: Ukraine and Turkey.
The TurkStream pipeline, serving as an alternative, contributes approximately 3% of EU gas imports according to May data.
To reduce dependency, the EU has invested in LNG import terminals, particularly in Germany. Three floating terminals for regasification have already been installed, with plans for another before winter, as the quest for diversification continues.
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