The gas flow is halted. Ukraine has suspended the transit of Russian gas to the EU and Moldova.

The transit of Russian gas through Ukraine to Europe and Moldova has been halted following the end of the contract between Naftogaz and Gazprom. What consequences might this have for the EU, Ukraine, and Moldova? Special correspondent Yuri Doshchatov from RBC-Ukraine investigates.

· 5 years of the contract in numbers

· Slovakia and Hungary continue to hope for transit

· Transit will not occur despite the association agreement with the EU

· Consequences for Ukraine, the EU, and Moldova

Today, January 1, 2025, the supply of natural gas from Russia through Ukraine to European countries and Moldova has ceased. This is confirmed by data from the Gas Transmission System Operator. At 7 AM Kyiv time the “valves were shut off” both at the entry point of Russian gas at the Ukraine-Russia border and at the exit point at the Ukraine-Slovakia border. Thus, the 5-year transit contract between Naftogaz of Ukraine and Gazprom, concluded on December 30, 2019, has come to an end.

This was the second commercial transit contract in the history of Ukrainian-Russian relations, following the 11-year contract from 2009 to 2019. Sixteen years ago, the agreement was signed in Moscow under significant pressure from EU countries, which had been deprived of Russian gas for nearly three weeks due to Russia's decision to cut off transit starting January 1, 2009. This occurred because the terms for gas purchases by Ukraine and its transit to the EU had not been agreed upon by the governments of Yulia Tymoshenko and Vladimir Putin.

In 2009, the issue of gas supplies was extremely pressing for the EU, as the dependence on Russian energy sources was significantly greater—over 100 billion cubic meters were transited through Ukraine each year. Recently, transit has barely exceeded 15 billion cubic meters, accounting for only 5% of total gas consumption in the EU.

The transit contract in 2019 was prepared as a separate agreement—Ukraine has not purchased gas from Russia since late 2015. The document was signed remotely—at that time, the executive director of Naftogaz, Yuri Vitrenko, was in Vienna, while Gazprom's head, Alexei Miller, was in St. Petersburg.

5 years of the contract in numbers

In fact, the contract became a compromise solution following the loss of the Russians in the Stockholm arbitration. As a result of the agreements, Gazprom paid Naftogaz about $2.9 billion. Ukraine, in turn, abandoned all existing and new lawsuits at that time.

The agreement stipulated gas supplies for transit on "take or pay" terms and monthly prepayment for 65 billion cubic meters of gas in 2020 and 40 billion in each of the following four years. There was also a provision for extending the contract for another 10 years.

RBC-Ukraine has previously reported on how the contract was fulfilled by the parties throughout its duration. Over 5 years, approximately 148 billion cubic meters of gas passed through Ukraine, whereas payments were supposed to be made for 225 billion cubic meters, which amounts to about $8.6 billion.

However, in 2022, transit decreased to 20.46 billion cubic meters due to the cessation of supplies through the "Sokhranovka" GIS in the Luhansk region. The Ukrainian side did not have control over the station but received confirmations that gas was being siphoned off in the occupied territories. In 2023, transit fell to 14.65 billion cubic meters and occurred only through one point—the "Sudja" GIS in the Kursk region. In 2024, transit volumes are expected to be around 15.4 billion cubic meters. Gazprom did not agree to redirect gas from "Sokhranovka" to "Sudja" in 2022 and reduced the payment amount.

Naftogaz viewed this as a breach of contract and turned to arbitration. A year ago, the claim amount was $700 million. It has since increased, but exact figures are not disclosed by Naftogaz.

Gazprom's revenues during the contract period were significantly higher. Even with reduced volumes in 2023-2024, they were around $6 billion per year. Such figures are provided by former head of the Gas Transmission System Operator of Ukraine, Sergey Makogon.

Slovakia and Hungary continue to hope for transit

The cessation of transit was not unexpected for anyone. In Ukraine, it was stated more than a year ago that the contract would not be extended. In December 2023, one of the first to announce this in an interview with RBC-Ukraine was the former head of Naftogaz, Alexei Chernyshev. The European Union had been preparing for a reduction in gas supplies from Russia since 2022, when the decision was made to eliminate dependence on Russian oil and gas by 2027.

Former European Commissioner for Energy Kadri Simson often spoke about the EU's readiness to halt transit. Her successor, Dan Jørgensen, shares the same position. "In the first 100 days (in office as EU Commissioner - ed.), I will present a plan to accelerate the elimination of our dependence on Russian gas by 2027," - he stated before taking