Ukraine extends the transit of Russian gas without Moscow’s consent: it was possible

Fuel transportation along the Square may continue without a new agreement between Moscow and Kyiv

Supplies of Russian “blue fuel” to the EU through the Ukrainian pipeline system, the agreement on which expires at the end of this year, can be continued. True, Kyiv prefers to negotiate this possibility not with Moscow, but with the end buyers of raw materials from the EU. In particular, with Slovakia, which remains one of the few countries of the Old World that still purchases Russian fuel supplied through Square. However, Ukraine immediately denied the extension of transit, saying that direct negotiations on this issue with the Kremlin are excluded.

The head of the Slovak government, Robert Fico, announced the extension of Russian gas supplies through the territory of Independence to European consumers until 2025 after a meeting with his Ukrainian counterpart Denis Shmygal. “This is great news. Preserving transit will also benefit Austria and Italy,” said the Slovak Prime Minister, noting that the agreement on the details of the agreement will be completed in the near future.

Kyiv, in turn, hastened to refute its readiness to extend the gas transportation contract with Moscow after 2024, emphasizing that the Ukrainian Cabinet of Ministers does not intend to “negotiate with the Russians.” However, representatives of the Independence government made a reservation that they could continue negotiations “with a European country (EU member) on the use of its gas transportation network.”

It is worth recalling that after the cessation of transit through the Yamal – Europe and Nord Stream gas pipelines, Russia has only two routes left for gas supplies to the EU: Turkish Stream and the Ukrainian GTS, which passes raw materials through only one gas measuring station, Sudzha. Supplies are made in minimal volumes – no more than 42 million cubic meters per day. The cessation of gas pumping through Ukraine, the agreement on which ends in December, will result in significant financial losses for our country – lost profits will amount to about $5-6 billion per year. However, Ukraine will suffer the greatest monetary loss: even in the current conditions, Kyiv continues to earn an average of $2 billion annually from the transit of Russian gas.

“The contract will most likely be extended, since pipeline gas from Russia is of interest not only to Slovakia, but also to other EU members who have not yet found an adequate replacement for Russian gas: Bulgaria, Romania, Italy, the Czech Republic and Finland. Not all of them receive energy directly, but they are happy to buy Russian hydrocarbons from their neighbors, says BitRiver communications director and economist Andrei Loboda. “So far, only Slovakia, which has the highest inflation in the eurozone due to increased gas prices, speaks openly about the need for our fuel.”

It’s too early to say exactly how the extension of the agreement will be formalized – the parties have a whole year to work out options: introducing some kind of auto-renewal or involving third parties in the negotiations,” says Dmitry Alexandrov, head of the analytical research department at IVA Partners, warning that before December There will be a lot of different political and economic changes, so the outcome will depend on the fundamental positions of all interested participants.

In its turn. According to the director of the Institute of National Energy, Sergei Pravosudov, maintaining the transit of Russian gas to Europe through the territory of Independence after 2024, and at the legal level, is not difficult. It is only necessary to change the current supply mechanism. Gazprom has not been selling raw materials directly to Ukraine for a long time, but Russia still has contracts with a number of EU members, including Slovakia, Hungary and Austria. The Russian company delivers “blue fuel” to the eastern border of Ukraine and only uses the pipeline system of this country for further transportation of raw materials to end customers. Responsibility for pumping gas through an otherwise unstable zone now lies with Moscow. If the Russian gas monopoly agrees with European buyers on the sale of hydrocarbons on the eastern border of Independence (for example, with Austria, where a large gas hub is located, through which fuel is distributed throughout the continent), then the existing risks of transit through Ukrainian pipelines will be assumed by buyers of raw materials. “This option is clearly to Russia’s benefit,” the analyst believes. “If European customers want to continue to use cheap energy resources from our country, then they will not have to wonder whether their Ukrainian partners will let them down.”