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What takes place when Russian gas supply to Europe through Ukraine ends?

Russian gas materials sent via Ukraine to Europe for more than 40 years are set up to end on January 1 after Ukraine's Naftogaz declined to restore its latest fiveyear transit deal with Russia's Gazprom.

In spite of the war between the two nations, Ukrainian President Volodymyr Zelenskiy on Dec 19 said Kyiv may consider allowing the transit of Russian gas if payments to Moscow were kept till the combating ends.

Russian President Vladimir Putin a week later on said there was no time left this year to sign a brand-new offer.

Here is what we know about options for when Russian gas transit by means of Ukraine stops.

HOW BIG ARE THE VOLUMES?

Russia's supply to Europe has fallen significantly in the wake of Moscow's intrusion of Ukraine in Feb. 2022 which spurred the European Union to cut its dependence on Russian gas.

Moscow invested half a century developing its European gas market share, which at its peak stood at about 35% but has actually been up to about 8%.

As of Dec. 1 the EU got less than 14 billion cubic metres (bcm) of gas from Russia through Ukraine, down from 65 bcm/year when the current five-year contract started in 2020.

The European Commission has stated that volume can be fully replaced by liquefied gas and non-Russian pipeline imports.

Moscow has lost market share to rivals such as Norway, the United States and Qatar.

Russia might make around $5 billion on sales by means of Ukraine this year based upon an average Russian government gas cost forecast of $339 per 1,000 cubic metres, Reuters computations show.

Ukraine makes between $800 million and $1 billion in transit fees annually.

EU gas rates rallied in 2022 to record highs after the loss of Russian products. With products set to end, EU authorities and traders state a repeat of that rally is unlikely offered the now modest volumes included and the little number of clients staying.

WHO IS AFFECTED?

The Ukraine path serves Austria and Slovakia

Austria got most of its gas via Ukraine, while Slovakia. takes around 3 bcm from Gazprom per year, about two-thirds of its requirements.

Gazprom stopped supply to Austria's OMV in mid-November over a legal dispute however volumes held steady by means of the route as other buyers actioned in.

Slovakia has said the loss of Russian supply would not strike its usage and that it has diversified supply agreements. Its primary gas purchaser SPP has contracts for non-Russian supply with BP, Eni, ExxonMobil, RWE and Shell.

WHAT CHOICES DO PURCHASERS HAVE?

Most other Russian gas routes to Europe are shut including Yamal-Europe by means of Belarus and Nord Stream under the Baltic Sea.

One choice is the TurkStream pipeline to Turkey under the Black Sea, Bulgaria, Serbia or Hungary. However, capacity is limited.

Slovakia's gas supply might originate from Hungary, approximately a. 3rd from Austria and the remainder from the Czech Republic and. Poland, according to Austrian energy regulator E-Control.

Austria ought to not deal with disturbances as it has actually prepared. for the switch in supply, its regulator has actually said.

The Czech Republic is most likely to tap more supply from Germany. pipelines benefiting from an exemption from a German. domestic gas levy from Jan. 1.

The Czech Republic has said it is ready to supply Slovakia. with gas transit and storage capabilities.

Russia provides Moldova with about 2 bcm of gas each year. It. is piped through Ukraine to the breakaway region of Transdniestria. where it is used to produce low-cost power that is offered to. government-controlled parts of Moldova.

Gazprom stated it plans to suspend supply on Jan. 1 mentioning. unpaid bills.

Moldovan Prime Minister Dorin Recean has condemned the. decision however stated the nation has diversified sources of supply. The country prepares steps to minimize consumption by a minimum of a. 3rd from Jan. 1.

When it comes to Ukraine, its security of supply will not be affected. as it does not use Russian transit gas, the European Commission. stated.

WHERE DOES THE GAS COME FROM?

The Soviet-era Urengoy-Pomary-Uzhgorod pipeline carries gas. from Siberia via the town of Sudzha - which is now under control. of Ukrainian military forces - in Russia's Kursk area.

It streams through Ukraine to Slovakia where the pipeline. divides into branches going to the Czech Republic and Austria.

Transdniestria borders Ukraine and likewise gets Russian. gas through Ukraine.

(source: Reuters)