Despite the
war between the two countries, Ukrainian President Volodymyr
Zelenskiy on December 19, 2024 said Kyiv might consider allowing the
transit of Russian gas if payments to Moscow were withheld until the fighting
ends.
Russian President Vladimir Putin a week later said
there was no time left this year to sign a new deal.
Here is what we know about options for when Russian gas
transit via Ukraine stops.
HOW BIG
ARE THE VOLUMES?
Russia's supply to Europe has fallen dramatically in the
wake of Moscow's invasion of Ukraine in February 2022 which spurred the
European Union (EU) to cut its dependence on Russian gas.
Moscow spent half a century building its European gas market
share, which at its peak stood at about 35% but has fallen to about 8%.
As of December 01, 2024 the EU received less than 14 billion
cubic metres (bcm) of gas from Russia via Ukraine, down from 65 bcm/ year when
the latest five-year contract began in 2020.
The European Commission has said that volume can be fully
replaced by liquefied natural gas and non-Russian pipeline imports.
Moscow
has lost market share to rivals such as Norway, the United States and Qatar.
Russia could earn around US$5 billion on sales via Ukraine
this year based on an average Russian government gas price forecast of US$339
per 1,000 cubic metres, Reuters calculations show.
Ukraine earns between US$800 million and US$ one billion in
transit fees per year.
EU gas prices rallied in 2022 to record highs after the loss
of Russian supplies. With supplies set to end, EU officials and traders say a
repeat of that rally is unlikely given the now modest volumes involved and the
small number of customers remaining.
WHO IS
AFFECTED?
The Ukraine route serves Austria and Slovakia. Austria
received most of its gas via Ukraine, while Slovakia takes around 3 bcm from
Gazprom per year, about two-thirds of its needs.
Gazprom halted supply to Austria's OMV in
mid-November 2024 over a contractual dispute but volumes held steady via the
route as other buyers stepped in.
Slovakia has said the loss of Russian supply would not hit
its consumption and that it has diversified supply contracts. Its main gas
buyer SPP has contracts for non-Russian supply with BP, Eni, ExxonMobil, RWE and
Shell.
WHAT
OPTIONS DO BUYERS HAVE?
Most other Russian gas routes to Europe are shut including
Yamal-Europe via Belarus and Nord Stream under the Baltic Sea.
One option is the TurkStream pipeline to Turkey under the
Black Sea, Bulgaria, Serbia or Hungary. However, capacity is limited.
Slovakia's gas supply could come from Hungary, roughly a
third from Austria and the remainder from the Czech Republic and Poland,
according to Austrian energy regulator E-Control.
Austria should not face disruptions as it has prepared for
the switch in supply, its regulator has said.
The Czech Republic is likely to tap more supply from Germany
pipelines taking advantage of an exemption from a German domestic gas levy from
January 01, 2025.
The Czech Republic has said it is ready to provide Slovakia
with gas transit and storage capacities.
Russia supplies Moldova with about 2 bcm of gas per year. It
is piped via Ukraine to the breakaway region of Transdniestria where
it is used to generate cheap power that is sold to government-controlled parts
of Moldova.
Gazprom said it plans to suspend supply on January
01, 2025 citing unpaid bills.
Moldovan Prime Minister Dorin Recean has condemned the
decision but said the country has diversified sources of supply. The country
plans measures to reduce consumption by at least a third from January 01, 2025.
As for Ukraine, its security of supply will not be impacted
as it does not use Russian transit gas, the European Commission said.
WHERE DOES
THE GAS COME FROM?
The Soviet-era Urengoy-Pomary-Uzhgorod pipeline
carries gas from Siberia via the town of Sudzha - which is now under control of
Ukrainian military forces - in Russia's Kursk region.
It flows through Ukraine to Slovakia where the pipeline
splits into branches going to the Czech Republic and Austria.
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