Ukraine’s energy diplomacy: what awaits gas transit in 2025 – a response from the former Minister of Housing and Communal Services
1 November 20:05
Negotiations with European companies have not yet resulted in a contract to replace Russian gas imports through Ukraine with supplies from Azerbaijan. Moreover, the current agreement between Moscow and Kyiv on Russian gas exports is coming to an end, with less than two months left to go. Will Ukraine manage to establish alternative supply schemes for European companies during this time and will this become public knowledge?
Bloomberg reported that companies from Hungary and Slovakia are considering signing a contract to import 12-14 billion cubic meters of gas a year from Azerbaijan. However, Slovak state-owned gas buyer SPP denied media reports that the deal was close.
“We regularly discuss this topic with our partners, but the information about the upcoming conclusion of a contract with SPP is not true,” SPP said in a statement.
It is worth noting that the Slovak state-owned SPP has remained a leader in efforts to preserve transit through Ukraine, given that alternative routes are more expensive.
At the same time, Ukraine offers alternative options to its European partners. According to RBK-Ukraine, the new scheme involves storing Azerbaijani gas in Ukrainian underground storage facilities with subsequent deliveries to Slovakia and other countries. Such a model, they say, will allow the supply to be considered re-export rather than transit, which could provide Ukraine with additional flexibility in terms of energy security and cooperation with the EU.
New transit conditions: Ukraine admits alternatives to Russian gas for the EU
Ukraine may change its approach to Russian gas transit after the current contract expires in 2024, allowing for alternative supply schemes for European companies. This was stated by Oleksiy Kucherenko, MP and former Minister of Housing and Communal Services of Ukraine, in an exclusive commentary
The MP recalls that President Volodymyr Zelenskyy has already stated that Ukraine does not intend to extend the current contract for the transit of Russian gas, but is ready to consider applications from European partners.
“It is difficult to understand what Volodymyr Zelenskyy meant. It is possible that Ukraine does not plan to extend the contract in its current form, but is open to deliveries provided that the gas is not Russian. This is a somewhat conditional approach, similar to the logistics of oil transit, when the supply is not formally considered Russian, although it passes through Russia,” notes Oleksiy Kucherenko
Ukraine has complicated energy relations with its neighbors, Hungary and Slovakia, which requires a diplomatic approach to ensure electricity supply in winter. According to the expert, agreements with these countries are important, in particular because of the intention to import 2.1 MW of electricity to compensate for the deficit.
Kucherenko also emphasizes the technical and security aspects that may complicate the refusal to transit.
“It is a big challenge for the Ukrainian gas transportation system to work for a long time without pressure from Russia. The last experience when the system operated autonomously was in 2009 at sub-zero temperatures of -20ºC, -25ºC, but then the level of production and storage reserves were much higher. This is a complex issue that concerns not only economic interests but also Ukraine’s energy security,” the expert explains.
Mr. Kucherenko summarized that the decision on transit should be made at the highest level, given its energy, economic and geopolitical nature:
“This is a presidential level issue. I hope that by the end of the year there will be clarity on transit, perhaps the decision will be made “under the Christmas tree,” summarizes Oleksiy Kucherenko
The end of the era of Russian gas transit through Ukraine is coming: what it means for Ukraine and Europe
The agreement between Ukraine and Russia on gas transit to Europe expires by the end of 2024, and this issue is already gaining international attention. Many people are asking why Ukraine did not abandon this agreement after Russia’s full-scale invasion began in 2022 The answer is simple – Kyiv was obliged to honor the contract to ensure stable gas supplies to its European partners, says the head of Naftogaz.
“The financial revenues from Gazprom do not even cover Ukraine’s expenses for organizing transit. Moreover, Gazprom has not been paying the full price for a long time. So we are actually working in the red,” Oleksiy Chernyshov
Even before the current contract was signed in 2019, the Oxford Institute for Energy Studies noted that Russia lacked only a small amount of capacity to do without Ukrainian transit, even without Nord Stream 2. According to experts, Gazprom could cover this capacity shortfall with European gas storage facilities and liquefied gas from Yamal. Historically, such gas projects have caused concern in the West: back in the 1980s, Ronald Reagan opposed the construction of the Yamal pipeline, anticipating the possible leverage it would give the Soviet Union over Europe. His fears proved to be prophetic.
Today, the issue of Russian gas transit through Ukraine is becoming critical to Europe’s energy security, and the European Union is actively seeking alternatives to avoid dependence on this route.
Author – Anastasia Fedor
