Ukraine is ready to extend the transit of Russian gas through its system, but only at the request of the European side and under new agreements with Moscow, Ukrainian Prime Minister Denys Shmyhal said at a press conference, reported Ukrainian Interfax.
“We, of course, are not going to negotiate with the aggressor country to extend [the transit contract] and sign the agreement <…>. If European countries act as a consortium… we are ready to provide such a service. Here the initiative is on the side of the EU,” he said.
The politician noted that Kiev has repeatedly negotiated on this topic with European leaders through the European Commission. As a consortium European Commission itself or a group of European countries that are interested in preserving transit may speak out.
If gas from Russia no longer flows through Ukrainian pipes, there are other options for using them. Some European countries could “act as a transit country for their own gas,” Shmyhal pointed out.
“We certainly have a plan B. The system will not be lost, our state needs it. We have other opportunities to use it, including for transit,” he emphasized.
The Ukrainian gas transportation system (GTS) can be modernized by Germany to transport hydrogen, Ukrainian Energy Minister German Galushchenko said in March 2023 following a meeting with German authorities. Galushchenko stated the enormous potential of such cooperation. The program of the current German government includes a point about the desire to deepen energy cooperation with Ukraine in order to develop the field of renewable energy and hydrogen production.
Last August, Galushchenko also promised that Ukraine would not negotiate with Russia on extending the transit contract.
“I think that next year will be indicative from the point of view of Europe’s ability to function without Russian gas at all,” he suggested.
Getting rid of Russian gas
The European Commission, in turn, is not going to negotiate with Russia on the continuation of the transit of Russian gas through Ukraine, European Commissioner for Energy Kadri Simson said in an interview with Ukrinform on March 4.
“On the contrary, according to our RePowerUE plan, we must get rid of Russian gas by 2027 at the latest. We are working intensively to provide countries with alternative supply routes and alternative suppliers, and at the same time to support Ukraine, for its better integration into the EU energy market,” she said.
Ukraine’s refusal to extend transit will lead to changes in all logistics chains, the Kremlin admitted. But Russia will be able to supply gas through other routes, said the press secretary of the Russian president, Dmitry Peskov.
“There are existing routes connected with Turkey, there are supplies of liquefied gas, alternative routes. But they are all largely blocked,” Peskov noted on January 26.
Austria, Slovakia, the Czech Republic and, in small quantities, Italy continue to receive Russian gas through Ukraine, European Commission representative Tim McPhie specified on February 28. The EU is working “closely” with these states so that they can receive gas through other gas pipelines, as well as switch to liquefied natural gas.
“We’re confident it’s possible,” McPhie said.
How Russian gas flows through Ukraine
The five-year contract between Russian Gazprom and Ukrainian Naftogaz will expire on December 31, 2024.
The agreement uses the “pump or pay” principle – this is the “European rule” according to which Gazprom entered into a contract for the first time in the history of Ukraine, explained the then executive director of Naftogaz, Yuriy Vitrenko.
“The fact that we signed a transit contract on a “pump or pay” basis for five years is an extraordinary event in such conditions,” he said.
The “pump or pay” principle means that if the consumer does not receive the required volume of gas, the supplier (in this case Gazprom) must reimburse the cost. An exception is the occurrence of force majeure circumstances.
According to the agreement, the Russian side was supposed to send at least 65 billion cubic meters through Ukraine in the first year and 40 billion cubic meters each in the next four. Ukraine is expected to receive more than $7 billion under the contract.
“The Ukrainian gas transportation system will be loaded, and this means energy security and the well-being of Ukrainians,” — said Ukrainian leader Vladimir Zelensky when concluding the contract.
Now the Ukrainian gas transportation system is the only direct route for the transit of Russian gas to Europe. There was a gas pipeline from Yamal to Europe, which bypassed Ukraine through Belarus, Poland, and Germany. However, it has not been operating since March 2022 due to Poland’s refusal to receive Russian gas.
Since the spring of 2022, Ukraine has been receiving gas only through the Sudzha, a town in Russia, gas measuring station. Gazprom noted that it is technically impossible to pump the entire volume provided for in the contract through it alone. The company’s official representative, Sergei Kupriyanov, reported on February 18 that 41.5 million cubic meters pass through Sudzha daily. The transit agreement assumes a daily pumping volume of about 109 million cubic meters.
