The Minister of Germany warned about the halt of the industry without gas from Russia

If Russia and Ukraine do not renew the gas transit agreement after 2024, Germany may be forced to reduce or even turn off industrial capacity, German Economy Minister Robert Habeck said. The contract between Kyiv and Moscow ends at the end of next year, writes Bloomberg.

On June 1, the former head of the Austrian oil and gas company OMV, Gerhard Reuss, said that Ukraine would not renew the contract with Russia for gas transit. The Russian Foreign Ministry then said that in this case, Kyiv would strike at the EU countries. Ukraine has not yet announced through official channels that it intends to withdraw from the agreement.

Habeck told an economic conference in Germany that policymakers should avoid “repeating the same mistake” by assuming the economy won’t suffer without precautions to secure energy supplies. Due to a potential shortage of gas in Eastern Europe, Germany is likely to have to make up for this shortfall, he said, and its producers could face a reduction in energy supplies. The country needs additional capacity, including a planned LNG terminal on Germany’s north coast to support supplies to both East Germany and Eastern Europe, Habek added.

After the outbreak of hostilities, Ukraine still receives payment for Russian transit through its territory to countries such as Austria, Slovakia, Italy and Hungary, recalls Bloomberg. The agency, citing a report by the Center for Global Energy Policy, also writes that if the agreement is extended, it will probably operate on different terms.

The throughput capacity of the Ukrainian GTS on the border with Russia is 288 billion cubic meters. m per year. Under the current contract, under the “pump or pay” condition, Russia must supply 40 billion cubic meters to Europe through Ukraine. m of gas per year (109 million cubic meters per day). The current contract, signed at the end of 2019, expires in 2024.

The transit of gas from Russia to the EU via the GTS of Ukraine fell sharply in May 2022, when Kiev refused to accept applications for pumping fuel through the Sokhranovka gas measuring station (GIS) in the Rostov region, from where gas is supplied to the territory of the LPR. Since then, transportation has been carried out only through the Sudzha GIS in the Kursk region, from where the fuel goes to the GTS in the Ukrainian-controlled Sumy region. Early May 2022Gazprom” delivered 92–99 million cubic meters in transit through Ukraine. m of gas per day, after the blocking of applications for GIS “Sokhanovka” daily pumping fell by more than half to 41-43 million cubic meters. m.