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Ukraine ends transit of Russian gas to EU

January 1, 2025
in Business
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Russian gas supplies to EU states via Ukraine have ended after a five-year deal between Ukraine’s gas transit operator Naftogaz and Russia’s Gazprom expired.

Ukrainian President Volodymyr Zelensky said earlier that his country would not allow Russia to “earn additional billions on our blood” and had given the EU a year to prepare.

The European Commission said the continent’s gas system was “resilient and flexible” and that it had sufficient capacity to cope with the end of transit via Ukraine.

Russia can still send gas to Hungary, as well as Turkey and Serbia, through the TurkStream pipeline across the Black Sea.

The stopping of the flow through Ukraine marks the end of an era of cheap Russian gas in the EU.

Slovakia is the most affected, while the European Commission says the impact will be limited, thanks to careful planning and alternative supplies.

However, the strategic and symbolic impact for the whole of Europe is enormous.

Russia has lost an important market but its president, Vladimir Putin, says EU countries will suffer most.

The EU has significantly reduced imports of gas from Russia since it launched its full-scale invasion of Ukraine in 2022, but a number of eastern member states still depend largely on the supplies, making Russia about €5bn ($5.2bn; £4.2bn) a year.

Russian gas was less than 10% of the EU’s gas imports in 2023, according to the bloc. That figure was 40% in 2021.

But several EU members, including Slovakia and Austria, continue to import significant amounts of gas from Russia.

Austria’s energy regulator said it did not forecast any disruption as it had diversified sources and built up reserves.

But Ukraine’s decision has already caused serious tensions with Slovakia, which is now the main entry point of Russian gas into the EU and earned transit fees from piping the gas on to Austria, Hungary and Italy.

On Friday, Slovakia’s Prime Minister Robert Fico – who had just made a surprise visit to Moscow for talks with Putin – threatened to stop supplying electricity to Ukraine.

This prompted Volodymyr Zelensky, Ukraine’s president, to accuse Fico of helping Putin “fund the war and weaken Ukraine”.

“Fico is dragging Slovakia into Russia’s attempts to cause more suffering for Ukrainians,” the Ukrainian president said.

Poland has offered to support Kyiv in case Slovakia cuts off its electricity exports – supplies that are crucial to Ukraine, whose power plants come under regular attack from Russia.

Moldova – which is not part of the EU – could be seriously affected by the end of the transit agreement. It generates much of its electricity at a power station fuelled by Russian gas. It also supplied the Russia-backed breakaway region of Transnistria, a small sliver of land sandwiched between Moldova and Ukraine.

Moldova’s energy minister, Constantin Borosan, said his government had taken steps to ensure stable power supplies but called on citizens to save energy.

A 60-day state of emergency in the energy sector has been in place since mid-December.

President Maia Sandu accused the Kremlin of “blackmail” possibly aimed at destabilising her country before a general election in 2025. The Moldovan government also said it had offered aid to Transnistria.

Russia has transported gas to Europe through Ukraine since 1991.

The EU has found alternative sources in liquefied natural gas (LNG) from Qatar and the US, as well as piped gas from Norway, since Russia’s invasion of Ukraine.

In December, the European Commission laid out plans to entirely replace gas transiting through Ukraine.



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Tags: endsgasRussiantransitUkraine

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