Gazprom Announces: Gas Supply to Europe Halted

Russian energy giant Gazprom has announced the suspension of natural gas deliveries to Europe via Ukraine. The volume of Russian gas transported through Ukraine dropped significantly in 2023, declining by approximately 28% compared to 2022, to 15 billion cubic meters. This is a sharp decrease from the 201.7 billion cubic meters delivered in 2021.

TRANSPORT AGREEMENT TERMINATED

Gazprom stated that the agreement governing the transit of Russian gas to Europe via Ukraine expired today at 08:00 Moscow Time.

In its statement, Gazprom emphasized Ukraine’s refusal to extend the agreement, saying:
“Gazprom has been deprived of the opportunity to supply natural gas through Ukraine. No Russian natural gas transit is being carried out via Ukraine.”

A SIGNIFICANT DECLINE

According to data released by the Ukrainian government for the end of 2023, the volume of Russian gas transported to Europe via Ukraine pipelines dropped by approximately 28% in 2023 compared to 2022, reaching 15 billion cubic meters. In contrast, this figure stood at 201.7 billion cubic meters in 2021.

This contract was estimated to provide Ukraine with an annual revenue of about $1 billion, while Gazprom reportedly earned over $3 billion annually from the arrangement.

With major pipelines such as Nord Stream 1, Nord Stream 2, and Yamal-Europe remaining idle, the suspension of transit through Ukraine leaves Turkey as the sole potential route for Russian gas to Europe.

RUSSIA’S GAS TRANSIT THROUGH UKRAINE

The Urengoy-Pomary-Uzhgorod Pipeline, built during the Soviet era, transports natural gas extracted in Western Siberia to Europe through Ukraine, starting from the Russian city of Sudzha.

The pipeline, which extends through Ukraine to Slovakia, also delivers gas to Hungary.

In May 2022, Ukraine halted gas transit through the Sohranivka distribution point, which handles about one-third of Russian gas flows to Europe. Since then, deliveries have been maintained only via the Sudzha point.

FINANCIAL IMPLICATIONS

Ukraine’s government estimates show that it earned about $1 billion annually from this agreement, while Gazprom reaped over $3 billion in annual revenues.

The ongoing challenges in gas transit highlight the shifting dynamics of energy supply in Europe, with Turkey emerging as a key alternative route for Russian natural gas deliveries.