Russia Gas Flow to Europe Via Ukraine Set to Halt as Deal Lapses

Kyiv: So, it looks like Russian gas is about to stop flowing to Europe through Ukraine. This is happening because the transit deal is expiring, and it’s a big deal for energy security over there.

According to reports, starting January 1, there won’t be any gas orders at the Sudzha intake station, which is a major point for gas coming from Russia. Normally, they’d be getting around 40 million cubic meters a day, but now it’s all set to drop to zero.

This is the first clear sign that the gas flow will actually stop at 6 a.m. Central European Time on New Year’s Day. The deal between Russia and Ukraine has been in place for five years, but now it’s running out, and there’s no backup plan in sight.

People are wondering if this halt will be permanent and how it will affect Europe, especially since they’re already dealing with a tight gas market. Even though the gas from Russia only makes up about 5% of Europe’s needs, the continent is still feeling the pinch from the energy crisis that started with the war in Ukraine.

Gas prices in Europe have already shot up to €50 per megawatt-hour, the highest they’ve been since November 2023, as everyone braces for the halt.

Over the weekend, Slovakia’s Prime Minister was urging the EU to step in and address this issue, saying it could cost European consumers a ton of money—up to €50 billion in extra gas prices and another €70 billion in higher electricity costs.

EU officials, however, have been saying that they’re not too worried about energy security when the deal ends. They’ve been working on diversifying their gas supplies since 2022, especially looking to the U.S. for liquefied natural gas.

Still, some Central European countries are hoping to keep getting cheaper gas from Russia while they can. They’ve been trying to find alternatives to the current deal, but it’s a race against time.

Slovakia claims it can manage without Russian gas, but bringing in other supplies could be pricey. Plus, Russian gas used to flow through Slovakia to Austria and the Czech Republic, but those countries have stopped buying directly from Gazprom.

It’s a bit of a mess. The nominations only show gas supplies for January 1, and it’s unclear what will happen after that. There have been disputes between Russia and Ukraine before that have disrupted gas supplies in the past.

Back in 2009, gas flows stopped for almost two weeks during a cold snap, affecting over 20 countries until they sorted things out. But with the ongoing war, it’s hard to see a quick fix this time around.

Ukrainian President Zelenskiy has made it clear he won’t agree to anything that would benefit Russia while the conflict is still going on. Meanwhile, Putin has said there’s no time left to finalize any agreement before the year ends.

Some European countries have even suggested ways to label Gazprom’s gas as non-Russian, but that’s a complicated issue. There are talks about taking ownership of the gas when it enters Ukraine or involving Azerbaijan’s energy company as a middleman.

Russia is still supplying gas to some countries like Serbia and Hungary through a different pipeline, but that won’t make up for the loss of the Ukraine route. Other routes, like the one through Poland, are closed, and the Nord Stream pipeline has been damaged since 2022.