The Uncertain Future of Russian Gas Transit via Ukraine to Europe

The transit of Russian gas through Ukraine may end in late 2024 if no agreement is reached between European buyers and Kyiv. This decision could increase pressure on the European energy market.

Partagez:

The gas transit contract between Russia and Ukraine, signed for five years, expires at the end of 2024. This transit allows Europe to receive Russian gas via Ukraine despite the war, particularly through the Sudzha interconnection point. However, the continuation of these deliveries now depends on an agreement between European buyers and the Ukrainian government.

Alexander Novak, Russia’s Deputy Prime Minister, expressed Russia’s willingness to continue gas deliveries to Europe via Ukraine but clarified that the decisions are no longer solely in Moscow’s hands. “We are ready to supply [the gas], although little depends on us. Agreements should be directly established between European consumers and the transit country,” he said.

Challenges for Europe

A transit halt could impact many European countries still reliant on these deliveries. Among them, Austria and Slovakia are the primary beneficiaries of this transit. Companies like OMV in Austria and SPP in Slovakia anticipate the possibility of compensating for these volumes with other sources in case of an interruption. However, Slovakia is actively advocating for new agreements to ensure the continuation of transit via Ukraine, not only to secure its supply but also due to the substantial revenues generated as a transit country to other nations.

Ukraine’s Opposition

Despite European demand, Ukraine firmly stands on its position of not extending the current agreement with Russia. Ukrainian Prime Minister Denys Shmyhal stated in October 2024 that Kyiv does not consider an extension of this agreement, citing the need to gradually reduce European countries’ dependency on Russian gas. Ukraine aims to diversify its energy supply, despite the impact that a transit halt could have on countries like Slovakia.

Effects on Energy Prices

Uncertainty over Ukrainian transit has influenced gas prices in Europe. Delivery contracts for January and February 2025 show higher rates compared to other periods on the TTF (Title Transfer Facility) trading curve through 2030. The January 2025 TTF contract was assessed at €40.67/MWh in early November, reflecting market concerns over the potential halt of these flows.

Potential Alternatives and Cooperation Prospects

Talks have taken place between Azerbaijan, Russia, and Ukraine to explore the possibility of facilitating the transit of Azerbaijani gas via Ukraine. Azerbaijani President Ilham Aliyev has cautiously expressed optimism about the negotiations, hoping for a breakthrough. Furthermore, Naftogaz, the Ukrainian national company, is considering two scenarios: either a complete cessation of Russian flows or an alternative model where other suppliers could meet the EU’s needs. One condition would be that gas from Socar, an Azerbaijani company, is stored in Ukraine.

The volume of Russian gas transiting through Ukraine has drastically declined in recent years, dropping from 117 billion cubic meters in 2008 to just 14.65 billion in 2023, underscoring the decline of this historical corridor for Russian gas to Europe.

The increase in oil drilling, deepwater exploration, and chemical advances are expected to raise the global drilling fluids market to $10.7bn by 2032, according to Meticulous Research.
Enbridge Gas Ohio is assessing its legal options following the Ohio regulator's decision to cut its revenues, citing potential threats to investment and future customer costs.
The small-scale liquefied natural gas market is forecast to grow at an annual rate of 7.5%, reaching an estimated total value of $31.78bn by 2030, driven particularly by maritime and heavy-duty road transport sectors.
The European Union extends gas storage regulations by two years, requiring member states to maintain a minimum fill rate of 90% to ensure energy security and economic stability amid market uncertainties.
Energy Transfer strengthens its partnership with Chevron by increasing their liquefied natural gas supply agreement by 50% from the upcoming Lake Charles LNG export terminal, strategically aiming for long-term supply security.
Keranic Industrial Gas seals a sixty-day exclusivity deal to buy Royal Helium’s key assets, raise CAD9.5mn ($7.0mn) and bring Alberta’s Steveville plant back online in under fifteen weeks.
The Irish-Portuguese company Fusion Fuel strengthens its footprint in the United Arab Emirates as subsidiary Al Shola Gas adds AED4.4 mn ($1.2 mn) in new engineering contracts, consolidating an already robust 2025 order book.
Cheniere Energy validates major investment to expand Corpus Christi terminal, adding two liquefaction units to increase its liquefied natural gas export capacity by 2029, responding to recent international agreements.
A study by the International Energy Agency reveals that global emissions from liquefied natural gas could be significantly reduced using current technologies.
Europe is injecting natural gas into underground storage facilities at a three-year high, even as reserves remain below historical averages, prompting maximized imports of liquefied natural gas (LNG).
South Korea abandons plans to lower electricity rates this summer, fearing disruptions in liquefied natural gas supply due to escalating geopolitical tensions in the Middle East, despite recent declines in fuel import costs.
Russia positions itself to supply liquefied natural gas to Mexico and considers expanded technological sharing in the energy sector, according to Russian Energy Minister Sergey Tsivilyov.
Israel has partially resumed its natural gas exports to Egypt and Jordan following a week-long halt due to the closure of two major offshore gas fields, Leviathan and Karish.
Nepal reveals a significant potential reserve of methane in the west of the country, following exploratory drilling conducted with technical support from China, opening new economic prospects.
Petronas formalizes a memorandum with JOGMEC to secure Japanese LNG deliveries, including a first cargo from LNG Canada scheduled for July at Toho Gas.
Belgrade is currently finalising a new gas contract with Russia, promising Europe's lowest tariff, according to Srbijagas General Director Dusan Bajatovic, despite Europe's aim to eliminate Russian imports by 2027.
TotalEnergies and QatarEnergy have won the Ahara exploration licence, marking a new stage in their partnership with SONATRACH on a vast area located between Berkine and Illizi.
After four years of interruption due to regional insecurity, TotalEnergies announces the upcoming resumption of its liquefied natural gas project in Mozambique, representing a $20bn investment.
The French group has acquired from PETRONAS stakes in several licences covering more than 100,000 km² off Malaysia and Indonesia, consolidating its Asian presence and its exposure to the liquefied natural gas market.
In response to rising summer electricity consumption, Egypt signs import agreements covering 290 shipments of liquefied natural gas, involving major international firms, with financial terms adjusted to the country’s economic constraints.