Ukraine has halted the transit of Russian gas to the EU and Moldova.
Ukraine has halted the transit of Russian gas to the EU and Moldova
The transit of Russian gas through Ukraine to Europe and Moldova has been stopped following the expiration of the contract between Naftogaz of Ukraine and Gazprom.
What consequences could this have for the EU, Ukraine, and Moldova? This was investigated by special correspondent RBK-Ukraine.
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 closed" both at the entry point of Russian gas at the border between Ukraine and Russia and at its exit at the border between Ukraine and Slovakia. Thus, the 5-year transit contract between Naftogaz of Ukraine and Gazprom, signed 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 were deprived of Russian gas for almost three weeks due to Russia's decision to halt transit starting January 1, 2009. This occurred because the terms for gas purchases by Ukraine and its transit to the EU were not agreed upon by the governments of Yulia Tymoshenko and Vladimir Putin.
For the EU, the issue of gas supplies in 2009 was extremely pressing, as the dependence on Russian energy resources was much greater—over 100 billion cubic meters were transited through Ukraine to the EU annually. 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, Alexey Miller, was in St. Petersburg.
5 years of the contract in numbers
In fact, the contract became a compromise solution after the Russians lost 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 legal and arbitration claims 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 the following four years. There was also a provision for the possibility of extending the contract for another 10 years.
RBK-Ukraine has previously reported on how the contract was executed by both parties throughout its duration. Over 5 years, approximately 148 billion cubic meters of gas passed through Ukraine, while payments were supposed to be made for 225 billion cubic meters, amounting 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" gas metering station in the Luhansk region. The Ukrainian side did not control 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 was conducted only through one point—the "Sudja" gas metering station in the Kursk region. In 2024, the transit volume is 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 amount of the claim was $700 million. Now it has increased, but Naftogaz has not disclosed the exact figures.
Gazprom's revenues during the contract period were significantly higher. Even with reduced supply volumes in 2023 and 2024, they amounted to approximately $6 billion per year. Such figures were 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 a surprise to anyone. Over a year ago, it was stated in Ukraine that the contract would not be extended. In December 2023, one of the first to announce this was the then-head of Naftogaz, Alexey Chernyshov. The European Union has been preparing for a reduction in gas supplies from Russia since 2022, when it was decided to completely eliminate dependence on Russian oil and gas by 2027.
Former European Commissioner for Energy, Kadri Simson, has repeatedly stated the EU's readiness for the cessation of transit. Her successor, Dan Jørgensen, holds the same position. "In the first 100 days (in office as Commissioner - ed.), I will present a plan to accelerate the elimination of our dependency on Russian gas by 2027," he stated before assuming his new role on December 1.
In recent years, the supply of liquefied natural gas (LNG) as an alternative to Russian gas to the EU has significantly increased from the United States, with Norway becoming the main supplier. Recently, European Commission President Ursula von der Leyen suggested to newly elected US President Donald Trump to further increase LNG supplies.
Most EU countries have already found alternatives to Russian Gazprom. This includes Austria and Italy. Interestingly, gas supplies to Austria were halted at the initiative of Gazprom itself a month and a half ago.
Even Hungary, which raised the issue of continuing transit during bilateral meetings at the beginning of the year, found an alternative route—through the "Turkish Stream." However, Budapest still hopes for transit through Ukraine, as it is a cheaper route. Recently, Hungarian Prime Minister Viktor Orban stated that negotiations with Russia and Ukraine regarding the preservation of gas transit are ongoing. "We are currently trying a trick... what if the gas that arrives in Ukraine is no longer Russian but already owned by the buyers," he said.
What "trick" Orban meant is unclear. Perhaps he was referring to a scheme that Hungary already uses for oil supplies through Ukraine. The essence is that Russian oil is purchased by a Hungarian company at the border and enters Ukraine already as Hungarian goods. They now want to do the same with gas. But this option is not suitable for Kyiv.
Amid Hungary and Slovakia's attempts to find a suitable option to maintain transit in the European energy market, there are jokes that Budapest has decided to join one of Russia's extraction companies so that the gas transiting through Ukraine would definitely be considered Hungarian. "It is still unclear whether this is true or not, but the idea itself is quite creative," noted a source from the publication with contacts in the EU energy market.
Even if this is true, the implementation of such a "trick" is unlikely. The export of pipeline gas to Russia is restricted—it can only be done by Gazprom. Even Rosneft has not yet received the rights to such operations. However, given that gas issues in Russia are resolved, especially now, in the political rather than economic sphere, no options can be excluded.
But Slovakia is currently the most active. It continues to make efforts to achieve its goal and force Ukraine to agree to transit. Bratislava considered the option of purchasing gas from Azerbaijan with delivery through Russia and Ukraine. However, Baku has no free resources for supplies, so gas would need to be purchased from Russia. Consultations on the new supply scheme have been ongoing for quite a while. Ukraine even proposed its vision for solving the issue—injecting gas into storage with subsequent re-export. However, none of the options were deemed realistic. Supplies of gas from Azerbaijan would imply purchasing it from Russia, and Ukraine does not intend to continue financing the aggressor. President Volodymyr Zelensky personally stated this to Slovak Prime Minister Robert Fico on December 19.
Just a few days later, Fico flew to Moscow, where he discussed gas issues with Putin. He then effectively issued an ultimatum, stating that if transit were stopped, Bratislava would cease electricity supplies to Ukraine.
Such threats do not scare Ukraine. If Slovakia, which covers 19% of electricity imports, refuses, other partners—Poland, Hungary, and Romania—could increase their supplies. And if Hungary joins Slovakia's ultimatum, Ukraine will have a formal reason to take a reciprocal action regarding oil supplies for the refineries of these two countries, which continue to receive oil through the Druzhba pipeline.
Fico's trip to Moscow was publicly condemned in some EU countries, particularly in Lithuania and the Czech Republic. Lithuanian President Gitanas Nausėda stated that Fico is seeking to preserve the transit of cheap Russian gas, even if it means dealing with a war criminal. The leadership of the European