Pipeline gas supplies from Russia via Ukraine to Europe may come to an end next year when the transit contract between Moscow and Kyiv expires, the Ukrainian energy minister has told the FT.
According to German Galushchenko, the chances of the two sides negotiating a new contract are slim to non-existent. This means that the flow of gas will stop, ending Ukraine’s transit fee income and the supply of gas to countries such as Austria and Slovakia.
“I really can’t imagine how it could be bilaterally,” Galushchenko told the FT in an interview, adding that “I can tell you that we are preparing our system for a cut of supplies.”
The Ukrainian route accounts for some 5% of Russian gas exports to Europe or rather accounted for that 5% before most other routes were shut down last year by Gazprom. Still, the gas shipped via Ukraine supplies about half of Austria’s gas, per the latest data for May, cited by the FT. Slovakia relies on that pipeline for as much as 95% of its gas imports.
The Ukrainian energy minister suggested that the EU might want to broker talks on the extension of the contract with Moscow but the FT noted analysts believed this would be a challenge because of “the difficult optics of holding talks with Moscow.”
The European Union imports almost all of the natural gas it needs. Before Russia invaded Ukraine, imports from Gazprom accounted for about half of the total. Now, the share of Russian gas in the EU import mix has fallen significantly, with only two routes remaining open: Ukraine and Turkey.
The Turkish route—the TurkStream pipeline—supplies about 3% of EU gas imports, per May data.
To diversify away from this inconvenient dependence, the EU has been splurging on LNG import terminals, especially Germany. It has already installed three floating terminals for regasification and plans to add another one before this winter.