Will Ukraine stop gas transit from Russia to the EU? Shmygal responds to Fico's loud statement

Ukraine does not intend to extend the gas transit agreement with Russia's Gazprom, which expires on December 31, 2024. Thus, gas supplies to Europe through Ukraine are likely to stop on January 1, 2025.

This was reported to Bloomberg by the press service of the Cabinet of Ministers of Ukraine. The statement was made in response to the words of Slovak Prime Minister Robert Fico, who, after a meeting with his Ukrainian counterpart Denys Shmyhal, assured that the contract for the transit of Russian gas through Ukraine could allegedly be extended.

"The position of the Ukrainian side is clear: the transit contract expires at the end of the year. We are not going to negotiate with the Russians and extend the contract," the Cabinet of Ministers said. Gazprom declined to comment.

For now, Europe continues to receive Russian gas through Ukraine and Turkey. Ukraine remains the key route even though actual deliveries since the start of Russia's full-scale invasion of Ukraine have been less than 40% of the contracted volume.

On Wednesday, January 24, Slovak Prime Minister Robert Fico said that supplies could allegedly be maintained. "An agreement has been reached that the transit of Russian gas through Ukraine is likely to continue, and this is great news," Fico said after meeting with Shmyhal in Uzhhorod.

Without the renewal of the agreement, gas supplies from Russia through Ukraine may cease. However, according to analysts at the Energy Aspects consulting company, there is a chance that Gazprom will keep transit to the EU even without a new agreement. This is possible if Gazprom decides to book short-term capacity in Ukraine through auctions.

What will happen to the Ukrainian GTS after transit from Russia is stopped?

The Ukrainian Gas Transmission System Operator (GTSOU) has long since begun preparing for a "zero transit" scenario for gas from Russia. The GTSOU already has plans to conduct a large-scale optimization of the system and its use in the conditions of the actual absence of Russian gas transit to Europe.

In this regard, the GTSOU will need to create new areas of its operations. These include transportation of:

• biomethane
• hydrogen
• mixtures of hydrogen and methane

As Andrii Herus, Chairman of the Verkhovna Rada Committee on Energy, told OBOZ.UA, after the agreement is finalized, the domestic GTS should be rebuilt so that it is used more for its own needs. In addition to the supply of biomethane and hydrogen, the pipeline could be used, for example, to bring gas from Europe to Ukraine for storage and then back.

As a reminder, the agreement between Naftogaz of Ukraine and Gazprom on the organization of transportation, the transportation agreement between the Ukrainian holding and the Ukrainian Gas Transmission System Operator (GTSOU), as well as the inter-operator agreement between GTSOU and Gazprom were signed on December 30, 2019.

As reported, earlier, the Minister of Energy of Ukraine Herman Halushchenko said that Ukraine and Russia would not agree on the extension of the 5-year transit contract, as it was in 2019. According to him, Ukraine is preparing the system to reduce supplies.

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