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Gazprom Plans for End of Russian Gas Flows to Europe via Ukraine
Gazprom is assuming in its internal planning for 2025 that it would not be sending natural gas to Europe via Ukraine as of January 1, a source with knowledge of the Russian gas giant’s plans told Reuters.
Gazprom’s management has yet to approve the plan for next year, but its base-case scenario is that there would be no flows via Ukraine to Europe, according to Reuters’s anonymous source.
The gas transit deal for Russian flows to Europe via Ukraine expires on December 31, 2024.
Ukraine has said multiple times that it would not pursue talks about renewing the agreement with Russia.
Moscow, for its part, has said that it was open to talks about a possible extension of the deal. Last month, Vladimir Putin said that Russia is ready to continue delivering natural gas via Ukraine. Moscow is also ready to continue delivering gas to Europe using alternative routes, Putin said.
Russia’s exports to Europe and Turkey, excluding ex-Soviet countries, are expected to fall by one fifth next year, to just below 39 billion cubic meters (bcm), due to the end of the Ukrainian transit deal, according to the Reuters source. That would be down from more than 49 bcm of Russian exports to Europe and Turkey expected for 2024.
The European gas market is already bracing itself for the end of the gas transit deal for Russian flows via Ukraine.
Earlier this month, Slovakia’s state energy company, SPP, signed a short-term pilot contract with SOCAR to buy natural gas from Azerbaijan as it prepares for a possible halt to Russian supplies via Ukraine.
Europe’s natural gas market is in a precarious balance as winter begins and external factors will likely lead to a tight market at the end of 2024 and early 2025, according to Torgrim Reitan, chief financial officer at Norwegian energy major Equinor.
The natural gas market and prices in Europe will be shaped in the coming months by the end of the Russia-Ukraine gas transit deal and demand for LNG in Asia, Reitan told Bloomberg TV in an interview last week.
Equinor is the biggest producer of gas offshore Norway, which is now the single biggest supplier of natural gas to Europe, holding around 30% of the total European market.
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