The attack by Ukraine poses a threat to the main gas supply pipeline from Russia to the European Union (EU).
Where did Ukraine launch the attack?
Kiev has deployed hundreds of troops supported by armored vehicles, artillery, and drones across the Ukrainian border into Kursk province on August 6. By August 8, Ukrainian forces had penetrated as far as 35 km into Russia - according to the US War Studies Institute.
Russia has declared a state of emergency, evacuated thousands of residents, and quickly dispatched reinforcements to the area.
On August 9, clashes were reported very close to Sudzha, near gas pipeline of Russia to EU.
Why is Sudzha important for gas supply to Europe?
Sudzha, about 10 km from the Ukrainian border, plays a crucial role in the process of transporting Russian gas to EU.
According to Al Jazeera, an average of 42 million cubic meters of Russian gas flows into Ukraine each day, and the town of Sudzha is where the Russian gas pumping station for Europe is located.
Despite the conflict, Kiev still allows gas to continue flowing through the Soviet-era gas pipeline as part of a $2 billion per year contract between Ukraine's Naftogaz and Russia's Gazprom.
From Ukraine, gas is transported towards Slovakia, where it branches off, one branch to the Czech Republic, the other to Austria.
The transportation agreement will expire in January 2025. If the supply is disrupted before then, gas prices could skyrocket, severely affecting European consumers and industry.
What is the current situation in Sudzha?
Clashes are still intense in the outskirts of Sudzha. However, to date, hostile activities appear not to have damaged the gas supply to Europe.
Christoph Halser, a Rystad Energy analyst in Oslo, said that the flow had decreased by 5.8% to 37.25 million cubic meters on August 8, increasing by 3.2% to 38.5 million cubic meters on August 9.
On August 8, Ukrainian Energy Minister German Galushchenko stated that the transit route was still operational. On the same day, Gazprom and Naftogaz both said that operations would continue normally.
Why does Europe still import Russian gas?
In the short term, Europe has few alternatives - Mike Coffin, Director of Oil and Mining Research at the London-based Carbon Tracker consultancy, said.
While Western Europe can turn to liquefied natural gas (LNG) and the North Sea, some Central European countries have fewer options.
The share of Russian gas in Europe's total imports has decreased by more than half from 38% in 2021 to 15% in 2023.
However, countries still rely heavily on Russian gas transported through Ukraine "due to the historical development of pipeline infrastructure."
OMV of Austria signed a long-term supply contract with Gazprom in 2018 to provide over 6 billion cubic meters per year until 2040.
And MVM of Hungary signed a supply contract for 4.5 billion cubic meters per year until 2036, most of which is transported through the TurkStream pipeline via Turkey.
Can Russia shut off the tap?
Analysts have pointed out the risks that Gazprom may use the conflict as a pretext to reduce gas supplies.
However, Russia would lose around $4.5 billion per year if exports were to stop, based on the average expected gas price to Europe of $320 per 1,000 cubic meters in 2025.
Will Europe need to find alternative ways to buy gas?
Regardless of the outcome of the current attack, the contract between Naftogaz and Gazprom will expire at the end of this year.
One option is for Gazprom to supply gas through a different route, for example, via TurkStream, Bulgaria, Serbia, or Hungary. However, the capacity through these routes is limited.
EU has signed an agreement to double the amount of gas imported from Azerbaijan to at least 20 billion cubic meters per year by 2027, but the infrastructure and financing have yet to be implemented.
