Ukraine’s energy minister has announced that Russian gas transit through Ukrainian pipelines will cease on January 1st.
Ukrainian Energy Minister German Galushchenko confirmed that the flow of Russian natural gas through Ukraine’s transit network will end on January 1st. This follows the expiration of a key gas transit agreement between Moscow and Kiev on December 31st, an extension of which Ukrainian officials have repeatedly ruled out.
Despite reduced Russian gas supplies due to sanctions and the EU’s efforts to decrease energy dependence on Russia, several EU nations still rely on Russian gas.
Galushchenko, speaking at the German-Ukrainian Business Forum in Berlin on Wednesday, stated Ukraine is prepared for zero transit. He noted that Ukraine has conducted multiple stress tests on its gas system this year to simulate zero transit conditions.
“Our position is completely open. We are preparing for zero transit from January 1. And we have been [preparing] for a long time. This year alone we conducted several stress tests for our gas system to see how it will function with zero transit,” Galushchenko said, as quoted by the Ukrinform news agency.
The 2019 transit agreement between Naftogaz and Gazprom saw Gazprom pay nearly $3 billion, ensuring the Ukrainian system’s operation without losses for five years. Naftogaz initially lauded the deal for its contribution to domestic gas market security.
Ukraine’s transit network connects to Moldova, Romania, Poland, Hungary, and Slovakia. Current data indicates that around 5% of the EU’s gas still comes from Russia via Ukraine.
The Naftogaz transit system and the European branch of TurkStream are the only remaining pipelines supplying Russian gas to central and southern Europe. TurkStream runs from Russia to Türkiye via the Black Sea, then to the border of Greece, an EU member state.
Russia has indicated its willingness to continue deliveries beyond 2024. Gazprom CEO Aleksey Miller warned in October that the EU’s rejection of Russian gas would constitute “energy suicide,” leading to deindustrialization, market volatility, price shocks, and potential supply disruptions.
Hungary and Slovakia, heavily reliant on Russian gas, share similar concerns. Hungary, under a 2021, 15-year contract with Gazprom, receives over half its gas from Russia.
Potential solutions include increased reliance on TurkStream and using Azerbaijan gas, transited through Ukraine to the EU.