Elena Covalenco with Ani Sandu in Bucharest
Tue, December 31, 2024
Map of Europe showing operational LNG import terminals, pipelines and transmission networks (Patricio ARANA) (Patricio ARANA/AFP/AFP)
Ukraine's decision to turn off the taps keeping Russian gas flowing via its territory to Europe has already sown trouble in the continent's east, with Moldova declaring a state of emergency and Slovakia threatening Kyiv with retaliation.
Under a five-year deal signed in 2019 Ukraine had allowed Russia to pipe gas to Europe via its territory.
But that agreement is set to expire in the new year with Kyiv unwilling to extend it as a result of Moscow's invasion.
Although Europe has fought to wean itself off dependence on Russian gas since President Vladimir Putin sent troops into Ukraine in February 2022, several eastern European states still look to Moscow for much of their energy needs.
That represents an ongoing income stream for the Kremlin which Ukraine's President Volodymyr Zelensky wishes to dry up.
Almost a third of the Russian gas sold to Europe is transported via Kyiv's territory, said Phuc-Vinh Nguyen, head of the Jacques Delors Institute's Energy Centre.
The remainder is transported via a pipeline under the Black Sea to Bulgaria, Serbia and Hungary, or else by shipments of liquefied natural gas (LNG).
But Tuesday's data from Ukrainian operator OGTSU showed deliveries via the only entry point for Russian gas into Ukraine dropping to zero as of January 1, 2025.
- Moldova 'energy blackmail' -
The situation is at its most critical in Moldova, which borders Ukraine and has to contend with Russian-backed separatists at home.
The tiny nation had already introduced a 60-day state of emergency earlier this month in anticipation of Kyiv's expected cut.
Then on Saturday, Russia's Gazprom announced it too would halt gas deliveries due to a dispute over debt, sparking furious accusations of "oppressive tactics" from Moldova's prime minister.
In the capital Chisinau, where most of the festive light displays will be snuffed out, some residents voiced their fear of what comes next.
"It's terrible, nobody knows what's going to happen. I've bought some candles and a generator," Cristina, a 21-year-old student who refused to give her surname, told AFP.
Gazprom had already reduced its deliveries to Moldova since the beginning of the invasion, with the Russian company solely supplying the unrecognised breakaway state of Transnistria.
But the Moscow-backed region's power station still provides some two-thirds of the electricity consumed across the country.
"The Kremlin has once again resorted to energy blackmail in order to influence the 2025 parliamentary elections and undermine our European path," said Moldova's President Maia Sandu.
The pro-European politician was reelected in November after a vote marred by accusations of Russian interference.
Sandu offered humanitarian aid for the residents of breakaway Transnistria, who would otherwise find themselves without heating in the depths of midwinter.
But the local authorities refused, said Alexandru Flenchea, a former government official and conflict resolution expert specialising in the region.
In Russia's destabilisation strategy, "Transnistria is nothing more than collateral damage", Flenchea argued.
Phuc-Vinh agreed, charging that Putin was using gas as a "geopolitical weapon" to "undermine the region, feed the resentments of the population to influence support for Ukraine and sow the seeds of discord across Europe".
Moldova's government has responded with drastic measures to limit energy consumption, notably limits on lighting in public buildings and the use of lifts.
It also intends to make up the shortfall by buying electricity from neighbouring Romania.
- 'Totally irrational' -
With 14 billion cubic metres transported per year via Ukraine making up just five percent of the European Union's total gas imports, the bloc said it was "prepared" for the flow's cut.
In a report published in mid-December, the EU judged the impact to be limited.
"The Commission... has been working for more than a year specifically on preparing for a scenario without Russian gas transiting via Ukraine," it told AFP on Tuesday.
It said that the bloc's gas infrastructure had been strengthened in the past few years, and pointed to work on making "alternative supplies" available to affected countries.
After Austria's decision in December to terminate its long-term contract with Gazprom, only Slovakia is affected.
Slovakia's leader Robert Fico -- one of the Kremlin's few allies within the EU -- has cried foul over Kyiv's decision, travelling to Moscow to meet Putin in response.
"Accepting the unilateral decision of the Ukrainian president is totally irrational and wrong," Fico pleaded in a letter to Brussels, decrying "a major financial impact in a complicated economic period".
By way of response, the Slovak prime minister threatened to cut off the supplies of electricity Ukraine desperately needs, with Kyiv's own energy infrastructure battered by nearly three years of systematic Russian bombardment.
On the other hand neighbouring Hungary -- which like Slovakia has remained friendly to Moscow -- receives most of its Russian gas imports via the Black Sea pipeline.
As a result Budapest will remain largely unaffected by Ukraine's decision.
burs-anb/sbk/bc
Ukraine ends transit of Russian gas to EU
Nick Thorpe - Central Europe Correspondent and Laura Gozzi - BBC News
Tue, December 31, 2024
The Soviet-era pipeline enters Ukraine near the Russian village of Sudzha, which has been occupied by Ukrainian forces which have staged an incursion into areas of Russia's Kursk region [Reuters]
Russian gas supplies to EU states via Ukraine have ended after a five-year deal between Ukraine's gas transit operator Naftogaz and Russia's Gazprom expired.
Ukrainian President Volodymyr Zelensky said earlier that his country would not allow Russia to "earn additional billions on our blood" and had given the EU a year to prepare.
The European Commission said the continent's gas system was "resilient and flexible" and that it had sufficient capacity to cope with the end of transit via Ukraine.
Russia can still send gas to Hungary, as well as Turkey and Serbia, through the TurkStream pipeline across the Black Sea.
The stopping of the flow through Ukraine marks the end of an era of cheap Russian gas in the EU.
Slovakia is the most affected, while the European Commission says the impact will be limited, thanks to careful planning and alternative supplies.
However, the strategic and symbolic impact for the whole of Europe is enormous.
Russia has lost an important market but Russian President Vladimir Putin says EU countries will suffer most.
The EU has significantly reduced imports of gas from Russia since it launched its full-scale invasion of Ukraine in 2022, but a number of eastern member states still depend largely on the supplies, making Russia about €5bn ($5.2bn; £4.2bn) a year.
Russian gas made up less than 10% of the EU's gas imports in 2023, according to figures from the bloc, compared with 40% in 2021.
But several EU members, including Slovakia and Austria, continue to import significant amounts of gas from Russia.
Austria's energy regulator said it did not forecast any supply disruption as it had diversified sources and built up reserves.
But Ukraine's decision has already caused serious tensions with Slovakia, which is now the main entry point of Russian gas into the EU and earned transit fees from piping the gas on to Austria, Hungary and Italy.
On Friday, Slovakia's Prime Minister Robert Fico - who had just made a surprise visit to Moscow for talks with Russian President Vladimir Putin - threatened to stop the supply of electricity to Ukraine.
This prompted Mr Zelensky to accuse him of helping Mr Putin "fund the war and weaken Ukraine".
"Fico is dragging Slovakia into Russia's attempts to cause more suffering for Ukrainians," the Ukrainian president said.
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Poland has offered to support Kyiv in case Slovakia cuts off its electricity exports - supplies that are crucial to Ukraine, whose power plants come under regular attack from Russia.
Moldova - which is not part of the EU - could be seriously affected by the end of the transit agreement. The gas fuelled a power plant on which Moldova relies for most of its electricity needs. It also supplied the Russia-backed breakaway region of Transnistria, a small sliver of land sandwiched between Moldova and Ukraine.
Moldova's energy minister, Constantin Borosan, said the government had taken steps to ensure stable power supplies to the country but called on citizens to save energy. A 60-day state of emergency in the energy sector has been in place in Moldova since mid-December.
President Maia Sandu accused the Kremlin of "blackmail" possibly aimed at destabilising her country ahead of a general election in 2025. The Moldovan government also said it had offered aid to Transnistria.
[BBC]
Russia has transported gas to Europe through Ukraine since 1991.
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As the EU has reduced its dependence on Russian gas, it has found alternative sources in liquefied natural gas (LNG) from Qatar and the US as well as piped gas from Norway.
In December, the European Commission laid out plans it said would enable EU member states to entirely replace gas transiting through Ukraine.
Under the EU's contingency plans, affected countries will be supplied with Greek, Turkish and Romanian gas from the Trans-Balkan route, while Norwegian gas will be piped through Poland. More supplies will also reach central Europe through Germany.
Russia set to lose €5bn revenue as Ukraine turns off European gas supply tap
Joe Barnes
Tue, December 31, 2024
Naftogaz, Ukraine’s largest oil and gas company, will stop Russia using its pipeline - Pavlo Gonchar/SOPA Images/LightRocket via Getty
Russia is set to lose €5 billion (£4.14 billion) in gas sales as more than four decades of supplies sent to Europe via Ukraine come to an end.
Naftogaz, Ukraine’s largest oil and gas company, has refused to renew its latest five-year transit deal with Russia’s Gazprom, which lapses on Jan 1.
The Russian pipeline through Ukraine accounted for roughly 5 per cent of the European Union’s gas imports, despite attempts by the bloc to wean itself off shipments from Moscow since its invasion of Ukraine.
Ukraine is also giving up roughly €800 million a year in transit fees it had still been receiving from Russia despite the war.
The gas pipeline system in Ukraine about to be turned off, preventing Russia from selling to Europe - Vincent Mundy/Bloomberg
The expected shutdown marks an almost complete end to Russia’s major share in the European gas market, which at its peak stood at 35 per cent.
Moscow has lost market share to rivals such as Norway, the United States and Qatar.
On Tuesday, Gazprom said it would pump less gas than usual through the pipeline on its last day of operation.
The Kremlin-owned energy giant is expected to lose out on around €5 billion in annual profits, key funds for fuelling Vladimir Putin’s war in Ukraine, during the shutdown.
The end of the transit deal is unlikely to cause a repeat of the 2022 EU gas price rally, as the remaining volumes are relatively small.
Kyiv’s decision to end shipments of Russian gas through its territory to Europe is likely to impact Slovakia the most.
Bratislava’s pro-Kremlin government has resisted efforts by the rest of Europe to shift away from Russian supplies of fossil fuels during the almost three-year-long war.
Robert Fico recently visited Moscow to talk to Vladimir Putin about the imminent gas crisis for Slovakia - Gavriil Grigorov/Reuters
Robert Fico, its prime minister, questioned whether Ukraine had “the right to damage the economic national interests of a [EU] member state” during a visit to Moscow earlier this month for talks with Putin.
Austria and the Czech Republic, which also use the same pipeline, have shifted to alternative supplies.
The loss of cheap Russian gas supplies has contributed to a major economic slowdown across Europe, and a worsening cost of living crisis.
However, Viktor Orban, Hungary’s prime minister, has decided to continue the use of Russian gas via the TurkStream pipeline through Turkey – the last remaining supply into Europe.
Meanwhile, Putin used his traditional new year’s speech to say his country should be “proud” of its achievements under his 25-year rule.
“Dear friends, in just a few minutes 2025 will be ushered in, completing the first quarter of the 21st century,” he said in televised remarks.
“Yes, we still have a lot to decide but we can be rightfully proud of what has already been done.
“On this New Year’s Eve, the thoughts, hopes of relatives and friends, millions of people across Russia are together with our fighters and commanders.
“Now, on the threshold of a new year, we are thinking about the future. We are sure that everything will be all right. We will only go forward.”
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