HomeMediaLatest NewsWhether Russia needs transit through Ukraine after the completion of Nord Stream 2

Whether Russia needs transit through Ukraine after the completion of Nord Stream 2

26 March 2021

Salikhov Marcel R. President, Principal Director on Economic Studies, Head of the Economic Department

Marcel Salikhov, Director of the Center for Economic Expertise, National Research University Higher School of Economics, commented to Gazeta.ru on the future prospects of the current gas contract between Russia and Ukraine.

The construction of Nord Stream 2 will be completed this year, but this does not mean that Russia will then terminate the existing gas contract with Ukraine as it is unnecessary. Gazprom promises to keep the contract, although Kiev doubts it.

The Nord Stream 2 gas pipeline will be completed in 2021, Viktor Zubkov, Chairman of the Gazprom Board of Directors said.

In December 2019, a ten-year gas contract between Russia and Ukraine ended. The countries signed a new one, designed for five years - until the end of 2024. The total volume of pumped gas under this contract should be 225 billion cubic meters of gas in five years. At the same time, 65 billion cubic meters is the plan for 2020, 40 billion cubic meters each in 2021-2024.

The full text of the gas contract between Ukraine and Russia is unknown, but, apparently, the document provides for compensation in case of early termination, Marcel Salikhov, said.

“For this reason alone - compensation or fines - it makes no sense to terminate the contract before the expiration date,” he says.

Moreover, the commissioning of Nord Stream 2 does not automatically mean that the Ukrainian transit to Europe becomes unnecessary. “NS-2 is focused on deliveries for buyers in North-Western Europe, Ukrainian transit - for buyers in Central and Eastern Europe,” Salikhov noted.

“Finally, there is another argument in favor of keeping the contract. Without transit payments, tariffs for domestic consumers in Ukraine will have to be increased,” Salikhov concludes.

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