As the Russian gas transit contract through Ukraine approaches its expiration in 2024, the European Union faces a crucial choice, writes Sergiy Makogon.
Sergiy Makogon is Senior Energy Expert and he was CEO of from 2019 to 2022 Gas TSO of Ukraine the operator of Ukraine’s gas transportation network, considered one of the largest in the world.
Despite a significant reduction in dependence on Russian gas – from 40% to 12% – some EU member states wish to continue receiving gas from Russia, jeopardizing collective energy security and political autonomy.
Recent requests from Slovakia and Austria to extend transit highlight this dilemma and clash with the EU’s REPowerEU plan to end dependence on Russian fossil fuels by 2027.
Continued dependence on Russian gas not only undermines EU solidarity and unity, but also strengthens Russia’s war position in the context of its aggression in Ukraine.
This implies the urgency of a clear and unified EU position to end all imports of Russian gas (pipeline and LNG) and create a secure and independent energy future for the CEE region.
In 2023, Russia’s pipeline sales to Europe were estimated at 25 billion cubic meters (billion cubic meters), of which 14.56 billion cubic meters passed through Ukraine. About 12 billion cubic meters were sent to EU countries Slovakia, Austria and Italy, bringing Russia about $6 billion.
Austria is the largest importer of Russian gas, accounting for almost half of its total imports over the past 12 months. Italy also received a significant volume of Russian gas (estimated between 3 and 4 billion cubic meters) via the pipeline crossing Ukraine. Slovakia, which imports nearly 2 billion cubic meters, got about a third of its imports from Russia via Ukraine.
It is important to note that for these countries, gas imports from the Russian Federation are no longer dictated by technical restrictions of gas infrastructure or the lack of gas in the EU gas market, but rather by purely economic and political considerations.
Russia desperately wants to maintain its presence in the lucrative European gas market, seeking to continue its revenue stream and maintain its political influence over European countries. Pro-Russian politicians in Europe, together with Russian politicians, began to push for the continuation of the transit.
On March 26, Russia stepped up its action by attacking and damaging gas transit and storage infrastructure in western Ukraine for the first time, signaling to the European Union that without the transit of Russian gas to Ukraine, the EU will not have gas stored in Ukraine.
For Ukraine, the continuation of transit after 2024 is not critical from either an economic or technological point of view. In 2023, Ukraine’s transit fees from Russia, amounting to about $800 million, represented a modest 0.46% of its GDP.
The transit also poses a very difficult political issue for the Ukrainian government, as the population does not support such cooperation with Russia in the ongoing conflict. Therefore, Ukraine’s position is to refrain from direct negotiations with the Russian Federation regarding the extension of the transit agreement after 2024.
However, this ambiguous statement leaves room for different interpretations. Some European leaders perceive this as an opportunity to continue receiving gas from Russia via Ukraine. With the contract’s expiration date looming, officials in Slovakia and Austria have expressed support for continuing the transit.
Responding to claims that gas transit should cease in 2025, the Austrian Energy Authority said: “E-Control argues that transit can persist as long as the gas pipelines remain intact.”
CEO of Austrian energy company OMV Alfred Stern said: “As long as Gazprom supplies… we will continue to take these quantities from Gazprom.”
During his recent visit to Ukraine, newly elected Slovak Prime Minister Robert Fico noted: “I would be very happy if a solution was found. Perhaps, without the direct participation of Ukrainian businesses… I think they [gli ucraini] they would be making a serious mistake if they did not create the conditions for the transit of Russian gas to Europe because this is an issue that concerns not only Slovakia but also Italy and Austria, which support this idea”.
Such statements by politicians in support of the continuation of the transit completely contradict the vision of the NATO leadership, according to which the alliance should be prepared for the start of a potential military conflict with Russia in 3-5 years.
Unfortunately, the European Commission was unable to help reach a consensus on the implementation of sanctions on Russian LNG and the pipeline. Instead it gave each EU member state the opportunity to decide independently on the imposition of sanctions against Russian gas.
Obviously, Ukraine and Slovakia should not conflict over the extension of the transit contract beyond 2024.
Instead, these countries should collaborate to pioneer innovative business models. Imagine the potential of co-creating a regional gas hub, combining Europe’s largest gas storage facilities in Ukraine with Western gas hubs via Slovakia.
Envision the creation of a robust South-North gas corridor, seamlessly connecting LNG terminals in Greece and Turkey with gas markets in Central and Western Europe via the Trans-Balkan pipeline.
The current moment is optimal for the EU to ban the import of Russian gas through Ukraine and LNG, demonstrating solidarity and commitment to escape dependence on Russian energy resources and reducing the Russian state’s export revenue.
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