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Russian Gas Transit via Ukraine Ends: EU Assures “No Cause for Concern”

The EU is prepared for the end of Russian gas transit through Ukraine, replacing volumes with LNG and alternative pipelines. No price hikes expected for consumers

Russian Gas Halted Through Ukraine: EU’s Prepared Response

The End of Russian Gas Transit through Ukraine: What’s Next?

Russian gas exports through Ukraine came to a halt on January 1, marking the definitive end of a supply route that persisted even through years of conflict. As previously announced, Kyiv has refused to renew the transit agreement with Gazprom, which facilitated the delivery of 14 billion cubic meters (bcm) of gas to Europe last year. Most of this gas supplied Slovakia and Austria, the last European nations still importing Russian gas via pipeline, alongside Hungary, which uses an alternative route as well.

The original contract allowed for a much larger capacity of 40 bcm per year, but volumes steadily declined after the war began, as the EU adopted new energy security policies to reduce its dependence on Moscow.

A Dramatic Reduction in Russian Gas Imports

According to the European Commission, by Q3 2024, Russian gas accounted for just 20% of the EU’s pipeline imports (8.4 bcm), compared to nearly 45% in Q3 2019. This sharp decline is due in part to reduced flows via Nord Stream and the Yamal pipeline, as well as the EU’s diversification efforts.

Gas Supply Security: Why the EU Is Ready

Unlike the energy crisis triggered by geopolitical tensions in 2022, the EU is now better equipped to handle supply disruptions. A 2024 assessment by the European Commission described the impact of Ukraine’s transit agreement expiration as “limited.”

EU Gas System Preparedness

With its current infrastructure, the EU gas system has sufficient capacity to manage the end of the Ukraine transit agreement,” the report states. Enhanced LNG import capabilities, robust interconnection networks, and key EU-backed projects have strengthened the system’s resilience. Today, all member states can access LNG imports or alternative pipeline routes, enabling a full substitution of the volumes previously transiting through Ukraine.

At a recent Gas Coordination Group meeting, officials reaffirmed that there are no security concerns. Supplies will be maintained through alternative routes (including Germany and Italy) and withdrawals from reserves, which are currently 72% full—above the seasonal average of 69%. Furthermore, gas demand remains 18% lower than pre-crisis levels.

Experts predict no significant price increases for EU consumers, in contrast to the 2022 energy crisis. As of now, gas prices on Amsterdam’s exchange stand at €50/MWh.

Resistance and Challenges

However, some Central European nations still reliant on Russian gas could face localized difficulties. For instance, Slovakia estimates the pipeline shutdown could result in losses of €220 million.

In recent months, major Central European gas companies, including Slovakia’s SPP and Eustream AS and Hungary’s MOL and MVM, signed a joint declaration urging continued transit. Industrial clients from Austria, Italy, and Slovakia also expressed concerns about the potential economic impact.

Slovak Prime Minister Robert Fico warned on Facebook, “If Zelenskyy halts the flow of our gas, a severe conflict could arise.”

Alternative Scenarios: How Europe Can Adapt

A fall analysis by the European think tank Bruegel outlined three potential scenarios to replace the lost gas volumes:

Scenario 1: Replacing Russian Supplies with LNG

LNG offers flexibility in supplier selection but requires significant investments in import and storage infrastructure. Additionally, LNG is typically more expensive than traditional pipeline gas, which could affect consumer prices.

Scenario 2: Switching to Azerbaijani Gas through Ukrainian Pipelines

This option could stabilize Ukraine’s economy and strengthen EU-Ukraine energy ties without requiring new infrastructure. However, pipeline capacity may be insufficient to meet EU demand, and reliance on a single supplier poses risks.

Scenario 3: Negotiating a New Gas Agreement between the EU, Ukraine, and Russia

While a new agreement could create a more stable market and ease geopolitical tensions, negotiations would be highly complex. A lack of trust among the parties could hinder progress, and dependency on Russia would remain unresolved.

FAQs

Why is Russian gas no longer transiting through Ukraine?
The transit agreement between Kyiv and Gazprom was not renewed, halting Russian gas flows through Ukraine on January 1, 2025.

How has the EU prepared for this transition?
The EU diversified its energy supplies by increasing LNG imports and using alternative pipeline routes, creating a more resilient and flexible energy system.

Will this interruption impact consumer gas prices?
No significant price impacts are expected, thanks to adequate reserves and diversified supply options.

What is the current EU gas storage level?
EU gas reserves are 72% full, exceeding the seasonal average of 69%.

How has gas demand changed since the energy crisis?
EU gas demand remains 18% below pre-crisis levels.

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