On Wednesday, Russian gas supplies to Europe via Ukraine were halted with the expiration of the current 5-year transit agreement between Moscow and Kiev, representing an almost complete loss for Moscow, which once dominated the European gas market.
The rest of the countries that buy Russian gas – such as Slovakia, the Czech Republic, and Austria – have prepared alternative supplies, and analysts do not expect a significant impact on the market due to the cessation of the flow of Russian gas.
The position of the European Commission
The European Commission downplayed the impact of the cessation of Russian gas exports to Europe via Ukraine on Wednesday, 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.
The European Commission had previously expected that the impact of the cessation of Russian gas supplies would be limited, noting that the 14 billion cubic meters annually passing through Ukraine could be completely replaced by imports of liquefied natural gas and non-Russian pipelines via alternative routes.
The Commission noted at the time that the flexibility of the EU gas system had been further improved in recent years through initiatives, such as gas tank filling targets, energy efficiency measures, renewable energy deployment, and voluntary demand reduction measures.
On the other hand, Slovak Prime Minister Robert Vitso said on Wednesday that stopping gas transportation through Ukraine would have a “major” impact on the European Union countries, not Russia.
The pro-Russian Vetso has repeatedly warned that stopping gas transit will cost Slovakia hundreds of millions of euros as a result of loss of transit revenues and increased gas import fees from other parties, adding that this will also lead to higher gas and electricity prices in Europe.
European imports of Russian natural gas
In the third quarter of 2024, the volume of natural gas in the gaseous state imported from Russia was 54% less than it was in the first quarter of 2021. In the last three quarters, imports from Russia increased and their share is now close to that recorded in the third quarter of 2021. 2022, but it remains well below pre-Russian-Ukrainian war levels.
In the last three quarters of last year, imports from Russia increased, and their share became close to that recorded in the third quarter of 2022, but it remained much lower than levels before the Russian-Ukrainian war.
Russia’s share of EU imports of natural gas in the gaseous state decreased slightly from 22% in the third quarter of 2022 to 20% in the third quarter of 2024.
European imports of Russian liquefied gas
The import of liquefied natural gas imported from Russia increased in the third quarter of 2024 by 2% compared to what it was in the first quarter of 2021. However, due to the rise in prices, its value increased in this period by 150%, according to what was stated by the European Statistical Office (Eurostat). ).
Russia’s share in EU LNG imports fell from 12% in the third quarter of 2022 to 10% in the third quarter of 2023, but rose again to 20% in the third quarter of 2024.
The highest share was in the third quarter of 2024 for the United States, at 35%, according to Eurostat data.
European imports of liquefied gas from Russia and abroad
In the whole of 2023, the share of Russian gas via pipelines in European Union imports declined from more than 40% in 2021 to about 8% in 2023.
For pipeline gas and LNG combined, Russia accounted for less than 15% of total EU gas imports.
This decline came thanks to the sharp increase in LNG imports from other destinations and the general decline in gas consumption in the European Union.
European Union imports last year (the latest annual data available) were according to quotas as follows:
- Norway: 30.3%, or 87.8 billion cubic metres.
- US: 19.4%, or 56.2 billion cubic metres.
- Russia (via pipes and in liquid state): 14.8%, or 42.9 billion cubic metres.
- North African countries: 14.1%, or 41 billion cubic metres.
- Britain: 5.7%, or 16.6 billion cubic metres.
- Qatar: 5.3%, or 15.5 billion cubic metres.
- Other countries: 10.3%, or 29.9 billion cubic metres.
The European Union imported 120 billion cubic meters of liquefied gas in 2023, and the United States was the largest supplier to the bloc, with a 50% share of total imports, and imports from the United States nearly tripled compared to 2021.
The largest importers of liquefied natural gas in the European Union are as follows, according to the European Commission, which did not disclose country data:
- France.
- Spain.
- Holland.
- Belgium.
- Italy.
European demand for gas declined
In 2023, internal EU natural gas demand fell by 7.1% compared to 2022, falling to 12.71 million terajoules.
The largest declines in consumption occurred in:
- Portugal (20.2%).
- Austria (13.2%).
- Czechia (11.9%).
In contrast, the largest increases in consumption were recorded in:
- Finland (25.6%).
- Sweden (11.1%).
- Poland (5.2%).
Russian gas flow methods
Russian gas was flowing to Europe through 4 pipeline systems as follows:
- Nord Stream under the Baltic Sea.
- Line through Belarus and Poland.
- Line through Ukraine.
- TurkStream under the Black Sea via Türkiye to Bulgaria.
After the start of the war, Russia cut off most of the supplies through the Baltic, Belarus and Polish pipelines under the influence of Russian pressure to collect gas in rubles, and the Baltic pipeline was blown up.
Russia’s cutting of supplies caused an energy crisis in Europe, and Germany was forced to spend billions of euros to establish floating terminals to import liquefied natural gas that comes by ship. Users reduced their imports as prices rose, and Norway and the United States closed the gap to become the largest gas suppliers.
Europe viewed Russia’s cutting of supplies as energy blackmail, and made plans to completely eliminate Russian gas imports by 2027.
