Most likely no Russian gas transit via Ukraine from 2025: industry chief

There will most likely be no Russian gas transit via Ukraine from 2025, which means it is “critically” important for work to be carried out to optimize the Ukrainian grid, the head of gas industry group AGPU said.

Russian gas transit via Ukraine has dropped sharply, with just 12.1 Bcm of gas delivered to Europe in the first 10 months of this year.

“Since the beginning of the war, the transit of Russian gas through the territory of Ukraine has been at a record low and continues to decrease,” AGPU executive director Artem Petrenko was quoted as saying at an energy forum.

“It is most likely that after 2025 there will be no transit at all. Therefore, it is critically important to carry out work on the optimization of the Ukrainian gas system to the realities of today,” Petrenko said, according to an AGPU statement.

Despite the ongoing war, Russia’s Gazprom has continued to send gas to Europe via Ukraine, with volumes delivered at the Sudzha interconnection point on the Russia-Ukraine border.

But transit volumes have been well below contracted levels this year, with October seeing Gazprom pump just 38.3% of the contracted volume.

Ukraine’s Naftogaz, grid operator GTSOU and Gazprom signed in December 2019 a five-year gas transit agreement under ship-or-pay terms, meaning Gazprom is obliged to pay for transit whether it uses it or not.

The agreement is set to expire at the end of 2024 and Ukrainian energy minister German Galushchenko in August ruled out the prospect of Kyiv taking part in any talks with Russia regarding future arrangements for gas transit.

Gazprom is contracted to send 110 million cu m/d of Russian gas to Europe via Ukraine in 2023 and 2024 — or a total of 40 Bcm/year — before the contract expires.

Oleksiy Chernyshov, the head of state-owned Naftogaz, said last month Ukraine could not extend the current transit contract with Russia and called on the EU to accelerate the process of completely halting Russian gas imports.

Chernyshov said countries that still imported Russian gas were those landlocked states in central and eastern Europe without access to LNG terminals.

Austrian imports
Major regional buyers of the remaining pipeline gas from Russia include Austria, Hungary and Serbia, among others.

Austria’s OMV increased its imports of Russian gas to 5.4 TWh/month (0.5 Bcm/month) in the third quarter — up from 4.9 TWh/d month in the previous quarter.

OMV historically bought large volumes of gas from Gazprom but has increasingly looked to alternative supplies since the invasion of Ukraine in February 2022 amid concerns over the reliability of Russian imports.

Nonetheless, OMV purchased the increased volume in Q3 under its long-term supply agreements with Gazprom in Austria.

OMV warned, however, of the possibility of further or full gas supply disruptions from Russia — for example as a result of the discontinuation of the gas transit agreement between Ukraine and Russia.

Quoted by Austrian news portal ORL Nov. 9, Ukrainian Deputy Prime Minister Olha Stefanishyna said Ukraine would look to continue to transit Russian gas to Austria. “We are a reliable partner,” she was quoted as saying.

She added that Ukraine was trying to find a solution with EU partners.

Trans-Balkan corridor
Regasified LNG is also increasingly making its way into eastern and southeastern Europe, aided by the reversal of the Trans-Balkan pipeline corridor.

GTSOU general director Dmytro Lyppa said Nov. 7 at an industry event that the corridor was playing a key role in regional gas dynamics.

“We are convinced that this corridor is capable of connecting Greek and Turkish LNG terminals, underground gas storage facilities in western Ukraine and consumers in Central and Eastern Europe,” Lyppa said, according to a GTSOU statement.

“We believe that in combination with Romania’s significant increase in gas production and the development of LNG terminal infrastructure, this means that this project is worth a lot of attention,” he said.

Romania is due for a significant increase in its gas production capacity with the expected startup of the Neptun Deep field in the Black Sea in 2027.

OMV Petrom took the final investment decision for the development of Neptun Deep in June in a major boost to the gas sector in Romania, which was expected to become the EU’s biggest gas producer once Neptun Deep starts up.

It will also enable Romania to export more gas, including to neighboring Hungary.

Hungary’s government spokesperson Zoltan Kovacs said Nov. 8 that foreign minister Peter Szijjarto had concluded “important” agreements with his Romanian counterpart Sebastian Burduja including on energy security.

“The two countries have agreed to increase the capacity of the gas interconnection between the two countries so that Hungary can have greater access to gas from the Romanian Black Sea field,” Kovacs said.

Preparations for a new electricity interconnection were also underway, he said.
Source: Platts