Gazprom prepares for end of gas transit through Ukraine – Reuters

Russian gas monopoly Gazprom is planning for 2025 with the assumption that gas transit to Europe via Ukraine will cease after 31 December 2024. Source: Reuters Details: Ukraine has announced its intention to end the current transit agreement, which would mark the conclusion of more than half a century of gas supplies from Siberia to Central Europe.

This transit has historically been a stable source of revenue for the Russian budget.

Despite Kyiv's statements about its unwillingness to extend the deal, which generates up to US£1 billion annually for Ukraine in transit fees, Moscow has signaled readiness for negotiations and the possibility of continuing supplies through Ukrainian territory. However, Russia, once Europe's largest supplier of natural gas, has lost nearly all its European clients. This shift is a result of the EU's efforts to reduce dependency on Russian energy and the sabotage of the Nord Stream pipeline in 2022.

A source familiar with Gazprom's plans revealed that Russia's baseline scenario for next year assumes a complete halt to gas transit through Ukraine.

It is anticipated that Russian gas exports to "far abroad" markets (Europe and Turkiye) will decrease by 20% in 2025, amounting to less than 39 billion cubic metres, compared to over 49 billion cubic metres in 2024 due to the end of Ukrainian transit.

Background: 

• The termination of the transit agreement between Russia and Ukraine on 31 December is expected to have little impact on the strengthened European gas market.
• The Ukrainian government is not holding official negotiations on extending the transit of Russian gas after the current agreement expires.
• Azerbaijan's President Ilham Aliyev has expressed confidence in the outcome of potential negotiations between Russia and Ukraine to ensure the continued supply of Russian gas to several European countries through Ukrainian territory.
• Ukraine has no intention of extending the gas transit agreement with Russia, which expires at the end of 2024.

  However, it is open to discussing the transit of gas from other suppliers through its gas transmission system if requested by Europe.

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