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What happens when Russian gas to Europe by means of Ukraine stops?

Russian President Vladimir Putin fulfilled Slovak Prime Minister Robert Fico in the Kremlin on Sunday, an uncommon visit by a European Union leader to Moscow as a. agreement allowing for Russian gas to transit through Ukraine. nears expiration.

Ukrainian President Volodymyr Zelenskiy had stated on Thursday. that Kyiv might think about continued transit of Russian gas, but. just on condition that Moscow did not receive payment up until. after the war - a condition it was unlikely to accept. Putin. said that day that it was clear there would be no new deal with. Kyiv to send out Russian gas through Ukraine to Europe.

Here is what happens if Russian gas transit by means of Ukraine is. totally shut off and whom will be impacted most.

HOW BIG ARE THE VOLUMES?

Russian gas products to Europe by means of Ukraine are fairly. little. Russia shipped about 15 billion cubic metres (bcm) of gas. by means of Ukraine in 2023 - only 8% of peak Russian gas flows to. Europe through different paths in 2018-19.

Russia invested half a century developing its European gas market. share, which at its peak stood at 35%.

Moscow has lost its share to rivals such as Norway, the. United States and Qatar given that the Russian invasion of Ukraine in. 2022, which spurred the EU to cut its dependence on Russian gas.

EU gas costs rallied in 2022 to record highs after the loss. of Russian materials. The rally will not be repeated offered modest. volumes and a little number of consumers for the staying. volumes, according to EU authorities and traders.

UKRAINIAN PATH

The Soviet-era Urengoy-Pomary-Uzhgorod pipeline brings gas. from Siberia by means of the town of Sudzha - which is now under control. of Ukrainian military forces - in Russia's Kursk area. It then. flows through Ukraine to Slovakia.

In Slovakia, the gas pipeline divides into branches going to. the Czech Republic and Austria.

Russia's general gas exports via the path have held. constant regardless of the

blockage

of flows from Gazprom to Austria's OMV in. mid-November over a contractual conflict, and legal wranglings as. other buyers stepped in to buy the volumes.

Austria still gets most of its gas via Ukraine, while. Russia accounts for around two-thirds of Hungary's gas imports.

Slovakia takes around 3 bcm from energy huge Gazprom. each year, also about two-thirds of its requirements.

The Czech Republic practically totally cut gas imports from. the east in 2015, but began taking gas from Russia in 2024.

Most other Russian gas paths to Europe are shut consisting of. Yamal-Europe through Belarus and Nord Stream under the Baltic.

The only other functional Russian gas pipeline path to. Europe is the Blue Stream and TurkStream to Turkey under the. Black Sea. Turkey sends out some Russian gas volumes onward to. Europe including to Hungary.

WHY DOES THE UKRAINIAN ROUTE STILL WORK?

While staying Russian gas transit volumes are little, the. issue stays a problem for the EU. Lots of EU members such as. France and Germany have said they will not purchase Russian gas. anymore however the stance of Slovakia, Hungary and Austria, which. have closer ties to Moscow, challenges the EU typical technique.

The nations, who still get Russian gas, argue it is. the most economic fuel and likewise blame neighbouring EU countries. for high transit costs imposed on alternative materials.

Ukraine still makes $0.8-$ 1 billion in transit fees each year. from Russian gas transit.

According to Reuters computations, Gazprom's total. pipeline gas exports to Europe by means of all paths in 2024 have. increased to 32 bcm from 28.3 bcm in 2023, when they collapsed. to the most affordable level since the 1970s.

Russia could make around $5 billion on sales by means of Ukraine. this year based on a typical Russian federal government gas price. forecast of $339 per 1,000 cubic metres, according to Reuters. estimations.

Russia's gas pipeline export monopoly Gazprom plunged to a. net loss of $7 billion in 2023, its very first annual loss given that. 1999, because of the loss of EU gas markets.

Russia has said it would be prepared to extend the transit offer. however Kyiv has consistently stated it will not do it.

Another alternative is for Gazprom to provide a few of the gas through. another path, for instance via TurkStream, Bulgaria, Serbia or. Hungary. Nevertheless, capability via these paths is limited.

Hungary

has actually been eager to keep the Ukrainian path open, but stated it. would continue to get Russian gas from the south, by means of the. TurkStream pipeline on the bed of the Black Sea.

The EU and Ukraine have also asked Azerbaijan to help with. discussions with Russia regarding the gas transit offer.

A senior source at Azeri energy business SOCAR informed Reuters. on Friday that Moscow and Kyiv have failed to settle on the deal. brokered by Azerbaijan to continue Russian gas exports to Europe. through Ukraine.

(source: Reuters)