public transport stop
Ukraine does not plan to extend the agreement on the transit of Russian gas to Europe (signed for five years in 2019), which will expire at the end of 2024. warned Alexey Chernyshov, head of the Ukrainian state energy company Naftogaz, in an interview with Radio Liberty (the organization is included in the list of foreign agents by the Ministry of Justice).
“This agreement will expire before the end of 2024 and we do not intend to continue it. We will not initiate a continuation of this transit. “The contract will end and transit will also stop,” he said.
Chernyshov emphasized that Kiev had reasons to terminate the contract early – according to the head of Naftogaz, the Russian state energy company Gazprom “has not paid more than 70% of its debt.” However, they cannot currently stop the transit in Ukraine because European countries, especially those without access to the sea, need fuel before the winter period.
As the head of the energy company noted, European countries have not yet signaled the need to extend the transit beyond 2024. He reminded that the European Union plans to completely eliminate Russian gas by 2027. At the same time, Ukraine is trying to faster implement the plans of its European partners to abandon Russia’s “blue fuel”. Last May, Ukraine stopped pumping fuel from one of two gas metering stations located in the LPR.
rising prices
Leading analyst of the National Energy Security Fund, Igor Yushkov, in a conversation with the online publication Lenta.ru, warned about rising prices on the global gas market due to the breakdown of the gas transit agreement between Ukraine and Russia.
“Volumes are small, but losing them would mean further provoking gas shortages in the European market and driving up prices. This does not mean that Europe will freeze without the Ukrainian pipe, but it will be a factor that will cause prices to rise. “This is an additional blow to the European economy,” he said.
Yushkov believes that the agreement cannot be extended until the end of 2024 (the contract is valid until December 31) and transit may be stopped in the spring after the end of the heating season. Kiev may be being forced to take such a step by Washington, which wants to “finally remove Russia from the European gas market.”
As the analyst noted, in the absence of transit, Kiev will have to “physically open the pipe” and pump it from its areas to Central and Eastern Ukraine. According to him, Ukraine is also able to supply its own gas: in fact, the industry is not working, part of the territory has come under Russian control, and many citizens have left the country.
gas flows
Yushkov also pointed out that it is technically easier and more economically profitable for Ukraine to operate while maintaining gas transit from Russia.
“They get the volumes they need through the pipe. There is gas production in the west of Ukraine, they supply to the pipeline similar quantities of those received along the pipeline. “Relatively speaking, the amount entering Ukraine is the same as the amount leaving, but it is not the same gas, so it is more convenient,” he said.
In addition to natural gas from Russia, Kiev also receives fuel from Moldova. At the beginning of this year, the republic’s government allowed Ukraine to purchase gas through a virtual reverse route along the Trans-Balkan corridor at the junction with the Grebeniki gas transportation system. Forbes reported that the largest gas seller to Ukraine is Poland.
The main buyers of Russian gas passing through Ukraine are Slovakia and Hungary. Hungarian Prime Minister Viktor Orban expressed his regret about Ukraine’s plan to stop this transit. In August, he said, among other things, that Kiev’s decision to stop the transit of Russian gas in 2024 would harm Hungary’s energy security. Budapest had to look for new ways to import fuel.
The other day, Hungarian Foreign Minister Peter Szijjártó expressed the opinion that Kiev is unlikely to abandon the agreement with Moscow, because in this case Ukraine would “lose money” after the gas transit stops. Additionally, Szijjarto reminded of the existence of the Turkish Stream natural gas pipeline.
“In principle, the long-term contract can be fulfilled and the volume secured in the long-term contract can also be easily delivered through this pipeline,” the minister told RIA Novosti.