The EU promises to stop the transit of gas from Russia through Ukraine. What is the threat to Gazprom?

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to Muksun.fm (Khanty-Mansiysk) on the prospects for the Russian gas transit through Ukraine after the completion of the transit contract in force until December 2024.

In his opinion, the completion of the transit agreement will not mean the actual cessation of Yamal gas supplies to Europe through Ukraine, since objectively no one is interested in this.

"Let me remind you that in 2019 Gazprom did not want to sign this agreement, it was largely imposed by Europe. This was the principled political position of the EU, which wanted to guarantee the preservation of a large volume of transit through Ukraine. At the same time, Gazprom, on the contrary, planned to launch this volume through the Turkish Stream and Nord Stream 2. Therefore, even if Ukraine had intended to extend this agreement, Gazprom most likely would not have done so," the expert suggests.

For Russia, Ukrainian transit is currently the only way to supply Transnistria, Slovakia and Austria. Ukraine is also interested in storing Russian transit, as it continues to support the work of their gas measuring station. If it loses these volumes, the costs of maintaining the GTS will be shifted to the domestic consumers, which will lead to a sharp increase in tariffs.

In addition, Ukraine continues to use Russian gas for the so-called virtual reverse, when it is bought allegedly from European companies, but in fact it is taken from transit volumes on the territory of Ukraine.

"The main thing is that, for example, for Austria there is still no full-fledged alternative to Russian gas. As of December 2023, Russian gas accounted for 98% of all gas supplies to Austria. The country is working to reduce its dependence on Russian gas and completely abandon it by 2027. I think Austria and Slovakia will insist that the transit of Russian gas be maintained for the time being," Alexey Belogoryev stressed.