(Times of Update) — With more than 22,000 kilometers of gas pipelines, Ukraine has been a key player in European energy markets for decades. But by the end of the year, those strategic assets could be abandoned.
Times of Update’s most read articles
As negotiations intensify ahead of the heating season, the deal between Moscow and kyiv to ship Russian gas to Europe is unlikely to be renewed before it expires in December. That would halt the flows, which have continued through more than two years of large-scale invasions, and hit the market at a critical time.
“The end of transit through Ukraine really represents the end of an era that was slowly brewing,” said Margarita Balmaceda, a professor of international relations at Seton Hall University who specializes in the energy policy of post-Soviet states.
For the continent’s already strained energy markets, this means more uncertainty, as Russia would lose one of the last two pipelines that carry its gas to Europe. But Ukraine may be most at risk, losing the funds needed to support its energy infrastructure and its long-standing strategic position as a conduit for affordable energy supplies to Western allies.
For more than five decades, gas flows have been a key element of relations between Russia, Ukraine and Europe. Since the collapse of the Soviet Union, tensions over transit have been part of Russia-Ukraine relations. Disputes led to supply cuts in 2006 and 2009, which left several European customers without supplies for days due to freezing temperatures.
The current transit agreement between the Ukrainian state energy company Naftogaz JSC and the Russian group Gazprom PJSC was concluded in late 2019, at a time when the energy map of Europe was completely different. The flows along this route now account for less than 5% of the continent’s supplies, but this is still enough to have an impact on energy security.
The harsh reality for Ukraine is that no one needs a renewal of the gas transit pact more than kyiv. Financially, it stands to lose up to $800 million a year in transit fees, according to estimates by Mykhailo Svyshcho, an analyst at Kiev-based ExPro Consulting. That’s already about a third of what it was before.
While that is small change compared to the billions Russia has lost from European customers since its 2022 invasion, it may take more than a revival of the pact to restore flows after the Kremlin sought to militarize energy ties.
Most customers have managed to find alternatives. After relying on Russian gas for more than half of its needs before the invasion of Ukraine, Germany has increased its pipeline deliveries from Norway and strengthened its facilities to import liquefied natural gas from around the world. It is now independent of imports via Ukrainian pipelines.
That said, the door is not entirely closed. With German manufacturing under pressure, some opposition parties and business leaders are calling for a return to cheaper pipeline deliveries from Russia. The Ukrainian route would be…
