popular articles

Stopping gas transit via Ukraine redefines LNG routes

The end of Russian gas transit via Ukraine is forcing Europe to reorganize its LNG and pipeline supplies.
Ukraine gaz transit reroute

Please share:

The European Union aims to ban Russian fuel imports by 2027. However, almost half of Russia’s pipeline gas supplies to Europe and Moldova still pass through Ukraine, totaling 13.7 billion cubic meters (Bcm) in 2023. While the EU is discussing a possible future transit agreement with Azerbaijan, the current five-year gas transit agreement between Russia and Ukraine is due to expire at the end of 2024, raising concerns about the future of these gas volumes.

Impact on dependent European countries

Slovakia, Austria and Moldavia are the European nations most dependent on transit volumes, importing around 3.2 Bcm, 5.7 Bcm and 2.0 Bcm, respectively, in 2023. By 2022, Russian gas transiting through Ukraine was supplying EU countries via entry points in Slovakia and Moldavia. Moldova is adjusting its supply while having agreed with Ukraine on a continuous flow of Russian gas until the end of 2025, mainly destined for the pro-Russian separatist region of Transnistria. In 2023, the country imported 74% of its gas via Ukraine and, for the first time, received gas from Romania and the south via reverse flows through the trans-Balkan pipeline.

Consequences of flow interruptions

Stopping Russian gas flows via Ukraine would have a significant impact on countries dependent on these volumes. For example, when the transit extension expires after 2025, Moldova will have to redirect its 2 Bcm supplied via Ukraine, possibly via reverse flows from the trans-Balkan pipeline. To reach Moldova, Russian gas could use the Isaccea entry point between Romania and Ukraine, but a transit agreement for the short 25-kilometer distance through Ukraine would be required.
The trans-Balkan pipeline has been operating in reverse flow since the end of 2022, with 0.54 Bcm of gas entering Moldova via Ukraine from Romania through the Isaccea entry point in 2023. In addition, gas from the southern gas corridor in Azerbaijan, as well as from LNG import terminals in Turkey and Greece, can reach Moldova from the south. When the Russia-Ukraine transit agreement comes to an end, the only alternative supply routes for the countries of Central and Eastern Europe will be the Balkan Stream and the Horgos entry point between Serbia and Hungary.

Strategies for redirecting gas flows

Russian producer Gazprom and European importers are keen to maintain uninterrupted supplies via Ukraine, while Ukrainian officials deny any intention of renewing the agreement with Russia. Without Azerbaijan or another third party transiting gas after a swap agreement with Russia, the EU will require around 7.2 Bcm of gas from the LNG market. Terminals in Poland, Germany, Lithuania and Italy could route these volumes to the hardest-hit countries, such as Slovakia and Austria.
Rystad Energy forecasts potential changes in the 2023 gas balance for the countries concerned, assuming gas flows via Ukraine of 50% and 0% and capacity limitations at the relevant entry points. Without Russian gas, Slovakia would find itself at the end of the flow chain, requiring around 4 Bcm of gas delivered via the Lanzhot entry point from the Czech Republic. With additional regasification capacity in Poland only available in 2025, a zero-flow scenario could even result in reverse flows from Austria to Slovakia.
Austria, the largest importer of Russian gas in 2023, is reportedly looking to increase imports from Germany via the Oberkappel entry point, which is expected to operate at a maximum annual capacity of 8 Bcm. However, for Rystad Energy’s 2023 reference year, the import capacity at Oberkappel will not be sufficient to cover the import deficit of 8.53 Bcm. Without short-term capacity adjustments, gas transits to Hungary would decrease, and outflows to Italy would come to a halt. If all Russian gas flows via Ukraine ceased, Austria would have to import up to 2.5 Bcm from Italy via the Arnoldstein-Tarvisio crossing.

Challenges for Italy and Hungary

Italy has several options for replacing Russian gas pipelines, and has largely succeeded in freeing itself from Ukrainian transit. However, the country is expected to supply around 3.75 Bcm to Slovakia and Austria. These additional supplies could come from the Ravenna floating storage and regasification unit (FSRU) – 5 Bcm per year from 2025 – and 1.23 Bcm from pipeline supplies via Tunisia.
Hungary would face major challenges in the event of a complete halt to the flow of Russian gas via Ukraine. Assuming Moldova is supplied from the south, the capacity of the trans-Balkan pipeline from Romania would be fully allocated, stopping inflows from Romania. Furthermore, Austria would be unable to transit gas to Hungary, while Croatia would have no additional regasification capacity available before 2025. Hungary should rely solely on increased gas flows via the TurkStream pipeline, where the Horgos entry point should operate continuously at its maximum capacity of 9 Bcm per year. Alternatively, if Austria could procure sufficient LNG from Italy, Hungary could receive additional gas via reverse flows at the Mosonmagyarovar entry point from Austria.
The countries of Central and Eastern Europe are preparing for a possible interruption in gas transit via Ukraine, and have joined forces to create a vertical gas corridor as part of the EU CESEC initiative. On January 19 this year, a memorandum of understanding was signed in Athens involving the European Commissioner for Energy, Kadri Simson, and transmission system operators from Greece, Bulgaria, Romania, Hungary, Slovakia, Ukraine and Moldova.

Register free of charge for uninterrupted access.

Publicite

Recently published in

South Korea Accelerates Energy Diplomacy Amid Growing Geopolitical Tensions

President Lee Jae-myung adopts an energy diplomacy rooted in national interest, amid a complex international landscape of rivalries that could create challenging situations for the country and its energy businesses.
Paris and Warsaw held a bilateral workshop in Warsaw to strengthen coordination on electricity infrastructure investments and supply security under the Nancy Treaty.
Paris and Warsaw held a bilateral workshop in Warsaw to strengthen coordination on electricity infrastructure investments and supply security under the Nancy Treaty.
Donald Trump firmly rejects any uranium enrichment by Iran, while Russia affirms Tehran’s right to civil nuclear power, intensifying tensions in negotiations over the Iranian nuclear program.
Donald Trump firmly rejects any uranium enrichment by Iran, while Russia affirms Tehran’s right to civil nuclear power, intensifying tensions in negotiations over the Iranian nuclear program.
Syria has signed a $7bn agreement with a consortium of companies from Qatar, Turkey and the United States to rebuild its national power sector.
Syria has signed a $7bn agreement with a consortium of companies from Qatar, Turkey and the United States to rebuild its national power sector.

Berlin firmly opposes any reactivation of the Nord Stream 2 pipeline

Friedrich Merz confirmed that Germany would block any attempt to relaunch the Nord Stream 2 pipeline, despite internal calls suggesting a potential reopening of dialogue with Moscow.
A memorandum of understanding formalises energy cooperation between the European Union and the Latin American Energy Organization, including permanent EU participation in the organisation’s governance bodies.
A memorandum of understanding formalises energy cooperation between the European Union and the Latin American Energy Organization, including permanent EU participation in the organisation’s governance bodies.
Prime Minister Viktor Orban announced that Hungary would oppose the EU's plan to ban Russian energy deliveries by 2027, both legally and politically.
Prime Minister Viktor Orban announced that Hungary would oppose the EU's plan to ban Russian energy deliveries by 2027, both legally and politically.
Michael Kretschmer, Minister-President of Saxony, proposed restarting dialogue with Russia on the Nord Stream 2 pipeline, despite clear opposition from the German government to any reactivation of the project.
Michael Kretschmer, Minister-President of Saxony, proposed restarting dialogue with Russia on the Nord Stream 2 pipeline, despite clear opposition from the German government to any reactivation of the project.

Trump urges London to favor offshore oil over wind power

Donald Trump is calling on the United Kingdom to abandon wind energy in favor of revitalizing offshore oil extraction, sparking debate over the economic and political implications of such an energy strategy after their recent trade agreement.
China and Egypt concluded over 30 energy-focused agreements, including electric vehicles, smart grids and storage technologies.
China and Egypt concluded over 30 energy-focused agreements, including electric vehicles, smart grids and storage technologies.
Facing Russian dominance in the Akkuyu nuclear project, Turkey accelerates international negotiations, aiming to mitigate risks related to energy dependency and potential strategic conflicts of interest.
Facing Russian dominance in the Akkuyu nuclear project, Turkey accelerates international negotiations, aiming to mitigate risks related to energy dependency and potential strategic conflicts of interest.
The European Union has expanded its measures against Russia by targeting nearly 200 new vessels illegally transporting oil, as part of its 17th sanctions package.
The European Union has expanded its measures against Russia by targeting nearly 200 new vessels illegally transporting oil, as part of its 17th sanctions package.

Why China is accelerating its investments in renewable energy abroad

Faced with domestic industrial overcapacity, China is stepping up its international renewable energy investments, aiming to dominate global value chains while opening new markets for its companies.
Brussels aims to persuade the G7 to reduce the Russian oil price cap to $50 per barrel, as part of negotiations on the next sanctions package targeting Moscow’s energy revenues.
Brussels aims to persuade the G7 to reduce the Russian oil price cap to $50 per barrel, as part of negotiations on the next sanctions package targeting Moscow’s energy revenues.
After three years of separation post-Brexit, the United Kingdom and the European Union have announced their intention to examine conditions for the UK's reintegration into the European electricity market, aiming to optimize cross-border exchanges.
After three years of separation post-Brexit, the United Kingdom and the European Union have announced their intention to examine conditions for the UK's reintegration into the European electricity market, aiming to optimize cross-border exchanges.
A structural partnership includes HVDC lines, natural gas power plants and desalination facilities, financed by a consortium including TAQA and Nareva.
A structural partnership includes HVDC lines, natural gas power plants and desalination facilities, financed by a consortium including TAQA and Nareva.

BRICS Warn of Energy Risks Linked to Economic Sanctions

The BRICS denounce economic sanctions and trade restrictions imposed by Western countries, warning of their consequences on global energy markets, especially regarding supply chains and financial stability in the energy sector.
In Kenya, China is consolidating its dominant position in the energy sector through massive exports of clean technologies and major infrastructure contracts, as Nairobi accelerates its energy and industrial targets for 2030.
In Kenya, China is consolidating its dominant position in the energy sector through massive exports of clean technologies and major infrastructure contracts, as Nairobi accelerates its energy and industrial targets for 2030.
Iranian officials met in Istanbul with the European trio to discuss the nuclear programme, as Washington threatens new sanctions in case of deadlock.
Iranian officials met in Istanbul with the European trio to discuss the nuclear programme, as Washington threatens new sanctions in case of deadlock.
The European Union has approved a new package of sanctions targeting 345 vessels suspected of helping Russia circumvent restrictions on crude oil and refined product exports.
The European Union has approved a new package of sanctions targeting 345 vessels suspected of helping Russia circumvent restrictions on crude oil and refined product exports.

The EU Maintains Its Goal to Ban Russian Gas Imports, Even After a Potential Peace Deal

Dan Jørgensen, European Commissioner for Energy, confirms that the EU will continue its ban on Russian gas imports, regardless of the outcome of peace negotiations in Ukraine, with legislative proposals expected in June.
On May 13, energy ministers from Baltic Sea countries signed a new memorandum of understanding to reinforce interconnections and energy security amid growing geopolitical tensions.
On May 13, energy ministers from Baltic Sea countries signed a new memorandum of understanding to reinforce interconnections and energy security amid growing geopolitical tensions.
Belgrade aims to retain favourable pricing terms for Russian gas imports as the current contract nears its May 31 deadline.
Belgrade aims to retain favourable pricing terms for Russian gas imports as the current contract nears its May 31 deadline.
The US president begins a state visit to Saudi Arabia focused on an ambitious economic partnership, sidelining Saudi-Israeli normalisation due to the Gaza war.
The US president begins a state visit to Saudi Arabia focused on an ambitious economic partnership, sidelining Saudi-Israeli normalisation due to the Gaza war.

Advertising