Russian natural gas exports through pipelines passing from Ukraine to Europe stopped in the early hours of Wednesday morning, the first day of the new year, after the transit agreement expired and Moscow and Kiev failed to reach an agreement to continue flows.
The closure of the oldest Russian gas transit route to Europe ends a decade that witnessed tense relations due to Russia’s seizure of the Crimean Peninsula in 2014, and the transit route dates back to the Soviet era.
Ukrainian Energy Minister German Galoshenko said in a statement, “We stopped the transit of Russian gas. This is a historic event. Russia is losing its markets and will suffer financial losses. Europe has already taken the decision to abandon Russian gas.”
Alternative methods
For its part, the European Commission downplayed the impact of the cessation of Russian gas exports through Ukraine, saying that the cessation on January 1 was expected, and that the European Union was prepared for that.
“Europe’s gas infrastructure is flexible enough to provide gas from a non-Russian origin to Central and Eastern Europe via alternative routes,” a Commission spokesman said.
“The European Union has been strengthened with significant new LNG import capacities since 2022,” he added.
For its part, the Austrian government said on Wednesday that Vienna was prepared for the expiration of the gas transportation agreement between Russia and Ukraine, and that supplies to the country were continuing through other sources, such as feeding points in Germany or Italy and from storage facilities.
Austrian Energy Minister Leonora Gevsler said in a statement, “We did our duty, and we were well prepared for this scenario,” adding, “Austria no longer depends on gas from Russia, and that is a good thing.”
Gas flows were expected to stop in light of the war that began in February 2022, and Ukraine insisted that it would not extend the agreement amid the military conflict.
A source in the sector said that Gazprom assumed last year that the gas would not pass through Ukraine, which represents nearly half of all Russian gas exports via pipelines to Europe.
Ustream, which operates the gas pipeline system in Slovakia, said that natural gas flows from Ukraine to Slovakia via a pipeline used to transport Russian gas to Europe stopped today.
Continuous supply
Russia still exports gas through the TurkStream pipeline at the bottom of the Black Sea. The pipeline contains two branches, one for the Turkish domestic market, and the other to supply gas to customers in Central Europe – such as Hungary and Serbia.
The European Union intensified its efforts to reduce its dependence on Russian energy after the outbreak of the Russian war in Ukraine in 2022 by searching for alternative sources.
The rest of the countries – which are still buying Russian gas, such as Slovakia and Austria – have prepared alternative supplies.
Ukraine will lose about $800 million annually in fees paid by Russia, and Gazprom will lose about $5 billion in gas sales to Europe via Ukraine.
Moldova – which was part of the Soviet Union – is among the countries most affected, and said it would have to take measures to reduce its gas use by a third.
The gas transit agreement – which lasted for 5 years between Russia and Ukraine – expired early today, Wednesday.
Ukrainian refused
“Gazprom” said in a statement on Telegram, “Due to the Ukrainian side’s repeated and clear refusal to renew these agreements, Gazprom was deprived of the technical and legal ability to supply gas through Ukrainian territory as of January 1, 2025.”
She added, “Russian gas will not be supplied through Ukrainian territory starting at eight o’clock Moscow time (05:00 GMT).”
The Ukrainian Energy Ministry also stated that the passage of Russian gas through Ukraine was “stopped in the interest of national security.”
As a result, Ukraine will lose about $800 million annually in fees paid by Russia, and Gazprom will lose about $5 billion in gas sales to Europe via Ukraine.
Other methods
It took Russia and the former Soviet Union half a century to obtain a major share of the European gas market, amounting to 35%, but the Ukraine war eliminated all that for Gazprom.
Most of the routes for transporting Russian gas to Europe were closed, including the Yamal-Europe line through Belarus and the Nord Stream line through the Baltic Sea to Germany, which was bombed in 2022.
Combined, the various routes transported a record amount of 201 billion cubic meters of gas to Europe in 2018.
Russia shipped about 15 billion cubic meters of gas through Ukraine in 2023, down from 65 billion cubic meters when the last contract began in 2020 for a period of 5 years.
