A lifeline for Ukraine on Russian gas

Ngọc Vân |

Continuing the transit of Russian gas through Ukraine could be a "lifeline" for Kiev, according to the expert.

The deadline for reaching an agreement on continuing the transit of Russian gas through Ukraine to Europe is approaching, as the current agreement expires on December 31, 2024. Without a solution, billions of cubic meters of gas could be blocked, putting the region at risk of energy shortages in the winter.

Bloomberg said that Slovakian Prime Minister Robert Fico and energy companies in Central Europe are putting pressure on Ukraine to continue to maintain the flow of gas from the Russian border through the country's 38,600km pipeline system. Slovakia and Hungary, two countries that still depend on cheap gas from Russia's Gazprom, are confronting the tough stance of Ukrainian President Volodymyr Zelensky.

Mr Zelensky has said he will not allow further transit of Russian gas through Ukraine. However, he is ready to consider gas transit from other countries if the European Union (EU) requests it.

Meanwhile, Slovakia has threatened to cut off electricity supplies to Ukraine if the gas route is blocked. Prime Minister Fico also said that stopping gas transit through Ukraine will cause the EU to bear additional energy costs of about 120 billion euros in the next two years.

The suspension of gas transit not only affects Europe but also poses a direct threat to Ukraine. The country's gas pipeline system, which has not been attacked for three years of conflict, could become a target if Russia no longer benefits from using it. This will also cause technical difficulties in maintaining heating for Ukrainian households during the cold winter.

Continuing gas transit through Ukraine could be a "lifeline" for Mr. Zelensky, according to Christian Egenhofer, a senior researcher at the Center for European Policy Studies (CEPS). This helps protect the country's critical energy infrastructure and avoid further losses in the short term.

Faced with the risk of not reaching an agreement, European countries are looking for alternative solutions. Slovakia has negotiated with the state oil company Azerbaijan (Socar) to import gas from Azerbaijan through a swap deal with Gazprom.

Hungary has proposed moving gas trading locations to the border between Russia and Ukraine, where gas will be sold directly to European companies. This forces Ukraine to ensure gas transit under free trade agreements with the EU.

However, these solutions face major obstacles due to Gazprom's long-term contracts with gas buyers.

For both Mr Putin and Mr Fico, the most profitable option would be for European buyers to continue buying gas directly from Gazprom. After that, Russia will stay in the EU market without having to share revenue with intermediaries and Slovakia will save on additional transit costs.

The Ukrainian Foreign Ministry said on December 27 that negotiations are ongoing and that a last-minute deal cannot be ruled out.

Unlike in previous crises, the EU is not directly intervening in the negotiations between Kiev and Moscow this time.

European gas prices have risen 48% this year, in response to expectations of supply cuts combined with rapidly depleted gas reserves due to cold weather.

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