Exports of Russian gas to Europe via Ukraine via Soviet-era pipelines came to a complete halt on New Year’s Day as Kiev refused to renew a transit agreement. This marks the end of decades of Russian dominance over European energy markets. TASR informs about it based on a Reuters report.
The widely expected shutdown will not affect prices for consumers in the European Union (EU), unlike in 2022, when a drop in supplies of the commodity from Russia it has shot its prices to record highs, exacerbated the cost-of-living crisis and hit the bloc’s competitiveness.
The European Commission said that the EU had prepared to stop supplies. “European gas infrastructure is flexible enough to provide gas of non-Russian origin,” said a Commission spokesperson, pointing to a significant increase in liquefied natural gas (LNG) imports from 2022.
Slovakia and Austria, the remaining buyers of Russian gas from the EU via Ukraine, secured alternative supplieswhile Hungary will continue to receive Russian gas through the TurkStream Black Sea pipeline.
Transnistria, a breakaway pro-Russian region of Moldova that also relied on flows through Ukraine, early on Wednesday morning, he interrupted the supply of heat and hot water to households. The local energy company, Tirasteploenergo, urged residents to dress warmly, hang blankets or thick curtains on windows and use electric heaters.
Ukraine, which has refused to extend the transit agreement, stands to lose up to $1 billion (962.56 million euros) a year in gas transit fees from Russia. In an effort to offset these losses, it will quadruple gas transmission tariffs for domestic consumers from Wednesday, which could cost the country’s industry more than 1.6 billion hryvnias (€36.66 million) a year.
Gazprom will lose almost 5 billion USD from gas sales. The main gas customer in Slovakia, SPP, stated that it will supply its customers mainly with gas pipelines from Germany and also from Hungary. but will face additional transit costs.
Russia and the former Soviet Union spent half a century building up a key share of the European gas market, which at its peak was around 35%. But since the start of the war in Ukraine in February 2022, the EU has reduced its dependence on Russian energy by buying more gas from Norway and LNG from Qatar and the United States.
While in 2018 Russia delivered a record 201 billion cubic meters (m3) of gas to Europe through several gas pipelines, after the closure of the Yamal-Europe gas pipeline through Belarus and damage to the Nord Stream pipeline in the Baltic Sea in 2022, Russia transported through Ukraine in 2023 only about 15 billion m3 of gas. That was a significant drop from 65 billion m3 in 2020, when the last five-year contract came into effect.
