Written by Vladimir Soldatkin and Dan Belichuk
MOSCOW/KYIV (Reuters) – Russian exports via Soviet-era pipelines through Ukraine to Europe halted in the early hours of New Year's Day as a transit deal expired and warring Moscow and Kiev failed to reach an agreement to continue flows.
The closure of Russia's oldest gas route to Europe ends a decade of fraught relations sparked by Russia's seizure of Crimea in 2014. Ukraine stopped buying Russian gas the following year.
Ukrainian Energy Minister German Galoshenko said in a statement, “We have stopped the transit of Russian gas. This is a historic event. Russia is losing its markets and will suffer financial losses. Europe has already taken the decision to abandon Russian gas.”
Gas flows were expected to stop amid the war that began in February 2022. Ukraine insisted that it would not extend the agreement amid the military conflict.
According to an industry source, Gazprom (MCX:) last year assumed no gas transit through Ukraine, which accounts for nearly half of Russia's total gas exports via pipelines to Europe.
Russia still exports gas through the TurkStream pipeline located on the bottom of the Black Sea. TurkStream has two routes – one for the Turkish domestic market and the other to supply Central European customers including Hungary and Serbia.
The European Union redoubled its efforts to reduce its dependence on Russian energy after the outbreak of military conflict in Ukraine in 2022 by searching for alternative sources.
Other buyers of Russian gas via Ukraine, such as Slovakia and Austria, have also arranged alternative supplies.
Moldova, which was once part of the Soviet Union, is among the worst affected countries. It says it will now need to take action to reduce gas use by a third.
There were no immediate comments from Europe in the early hours of Wednesday.
The five-year gas transportation agreement between Russia and Ukraine expired early on January 1.
Gazprom said in a statement: “Due to the Ukrainian side’s repeated and explicit refusal to renew these agreements, Gazprom was deprived of the technical and legal ability to supply gas for transit through the territory of Ukraine as of January 1, 2025.” Telegram messaging app.
He added, “As of 08:00 Moscow time (0500 GMT), the supply of Russian gas for transportation through the territory of Ukraine will not be implemented.”
The Ukrainian Energy Ministry also said that transportation of Russian gas through Ukraine “has been stopped in the interest of national security.”
Ukraine now faces a loss of about $800 million a year in transit fees from Russia, while Gazprom stands to lose nearly $5 billion in gas sales.
Other methods
Russia and the former Soviet Union had spent half a century building up a significant share of the European gas market, at its peak about 35%, but the war destroyed that trade for Gazprom.
The Yamal-Europe pipeline through Belarus has also been closed, and the Nord Stream route across the Baltic Sea to Germany has been blown up in 2022.
Combined, the various methods delivered a record 201 billion cubic meters of gas to Europe in 2018.
Russia shipped about 15 billion cubic meters of gas through Ukraine in 2023, down from 65 billion cubic meters when the latest five-year contract began in 2020.
