Moscow/London/Vienna Russia told Austria on Friday that it would suspend gas deliveries through Ukraine on Saturday. After this there has been a stir in all the countries of Europe. It’s a development that signals the imminent end of Moscow’s last gas pipeline to Europe. Let us tell you that this is Russia’s oldest gas export route to Europe. which has been running through Ukraine since the Soviet era. But this gas pipeline through Ukraine to Europe is also scheduled to close at the end of this year. Due to which the entire Europe may face a gas supply crisis.
Ukraine has said it will not extend a transit contract with Russian state-owned Gazprom ( GAZP.MM ). Russian gas producer to stop deliveries of natural gas to OMV via Ukraine. After the current five-year agreement between Russia and Ukraine expires, the supply of Russian gas to Europe through Ukraine may be completely stopped from January 1, 2025. Because Kiev has refused to negotiate new terms of transit with Moscow during the war. If Russian gas transport through Ukraine is completely stopped, let’s find out who will be affected the most?
There will be panic in Europe
The supply of Russian gas to Europe via Ukraine is relatively small. Russia sent about 15 billion cubic meters (bcm) of gas through Ukraine in 2023, just 8% less than the total Russian gas flowing through various routes to Europe in 2018-2019. Russia has spent half a century building its share of the European gas market. which at one time was up to 35% at its peak. But Moscow lost share to rivals such as Norway, the United States and Qatar after invading Ukraine in 2022, prompting the European Union to reduce its reliance on Russian gas.
Gas prices in Europe are skyrocketing
EU gas prices will hit record highs in 2022 after Russian gas supply cuts. The Soviet-era Urengoy-Pomorie-Uzgorod pipeline brings gas from Siberia to the city of Sudza in Russia’s Kursk region – now under the control of Ukrainian military forces. Then it flows from Ukraine to Slovakia. In Slovakia, the gas pipeline branches off to the Czech Republic and Austria. Austria still gets most of its gas through Ukraine, while Russia accounts for about two-thirds of Hungary’s gas imports.
Slovakia takes about 3 bcm from energy giant Gazprom ( GAZP.MM ), opening a new tab each year, about two-thirds of its needs.
How far does gas go from Russia?
The Czech Republic almost completely stopped importing gas from the east last year, but plans to start buying gas from Russia in 2024. Most other Russian gas routes to Europe are closed, including Yamal-Europe through Belarus and Nord Stream under the Baltic. The only other operational Russian gas pipeline routes to Europe are Blue Stream and TurkStream, which runs under the Black Sea to Turkey. Turkey sends some Russian gas volumes to Europe, including Hungary.
Many European countries still want gas from Russia
Does the Ukrainian route of gas supply still work? While the remaining Russian gas lines are limited. This issue is a point of confusion for the EU. Several EU members, such as France and Germany, have said they will no longer buy Russian gas, but the stance of Slovakia, Hungary and Austria, which have close ties to Moscow, challenges the EU’s general approach. Countries that still receive Russian gas argue that it is the most economical fuel and blame neighboring EU countries for charging high transit fees for alternative supplies. Based on an average gas price of $200 per 1,000 cubic meters, Russia earns more than $3 billion on sales through Ukraine, according to Reuters calculations. (Reuters)
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