Published by Global Banking & Finance Review®
Posted on December 31, 2024
4 min readLast updated: January 27, 2026
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Russian gas supply to Europe via Ukraine ends January 1, affecting Austria and Slovakia. EU seeks alternatives like LNG to replace Russian gas.
(Reuters) - Russian gas supplies sent via Ukraine to Europe for more than 40 years are scheduled to end on January 1 after Ukraine's Naftogaz refused to renew its latest five-year transit deal with Russia's Gazprom.
Despite the war between the two countries, Ukrainian President Volodymyr Zelenskiy on Dec 19 said Kyiv might consider allowing the transit of Russian gas if payments to Moscow were withheld until the fighting ends.
Russian President Vladimir Putin a week later said there was no time left this year to sign a new deal.
Here is what we know about options for when Russian gas transit via Ukraine stops.
HOW BIG ARE THE VOLUMES?
Russia's supply to Europe has fallen dramatically in the wake of Moscow's invasion of Ukraine in Feb. 2022 which spurred the European Union to cut its dependence on Russian gas.
Moscow spent half a century building its European gas market share, which at its peak stood at about 35% but has fallen to about 8%.
As of Dec. 1 the EU received less than 14 billion cubic metres (bcm) of gas from Russia via Ukraine, down from 65 bcm/year when the latest five-year contract began in 2020.
The European Commission has said that volume can be fully replaced by liquefied natural gas and non-Russian pipeline imports.
Moscow has lost market share to rivals such as Norway, the United States and Qatar.
Russia could earn around $5 billion on sales via Ukraine this year based on an average Russian government gas price forecast of $339 per 1,000 cubic metres, Reuters calculations show.
Ukraine earns between $800 million and $1 billion in transit fees per year.
EU gas prices rallied in 2022 to record highs after the loss of Russian supplies. With supplies set to end, EU officials and traders say a repeat of that rally is unlikely given the now modest volumes involved and the small number of customers remaining.
WHO IS AFFECTED?
The Ukraine route serves Austria and Slovakia.
Austria received most of its gas via Ukraine, while Slovakia takes around 3 bcm from Gazprom per year, about two-thirds of its needs.
Gazprom halted supply to Austria's OMV in mid-November over a contractual dispute but volumes held steady via the route as other buyers stepped in.
Slovakia has said the loss of Russian supply would not hit its consumption and that it has diversified supply contracts. Its main gas buyer SPP has contracts for non-Russian supply with BP, Eni, ExxonMobil, RWE and Shell.
WHAT OPTIONS DO BUYERS HAVE?
Most other Russian gas routes to Europe are shut including Yamal-Europe via Belarus and Nord Stream under the Baltic Sea.
One option is the TurkStream pipeline to Turkey under the Black Sea, Bulgaria, Serbia or Hungary. However, capacity is limited.
Slovakia's gas supply could come from Hungary, roughly a third from Austria and the remainder from the Czech Republic and Poland, according to Austrian energy regulator E-Control.
Austria should not face disruptions as it has prepared for the switch in supply, its regulator has said.
The Czech Republic is likely to tap more supply from Germany pipelines taking advantage of an exemption from a German domestic gas levy from Jan. 1.
The Czech Republic has said it is ready to provide Slovakia with gas transit and storage capacities.
Russia supplies Moldova with about 2 bcm of gas per year. It is piped via Ukraine to the breakaway region of Transdniestria where it is used to generate cheap power that is sold to government-controlled parts of Moldova.
Gazprom said it plans to suspend supply on Jan. 1 citing unpaid bills.
Moldovan Prime Minister Dorin Recean has condemned the decision but said the country has diversified sources of supply. The country plans measures to reduce consumption by at least a third from Jan. 1.
As for Ukraine, its security of supply will not be impacted as it does not use Russian transit gas, the European Commission said.
WHERE DOES THE GAS COME FROM?
The Soviet-era Urengoy-Pomary-Uzhgorod pipeline carries gas from Siberia via the town of Sudzha - which is now under control of Ukrainian military forces - in Russia's Kursk region.
It flows through Ukraine to Slovakia where the pipeline splits into branches going to the Czech Republic and Austria.
Transdniestria borders Ukraine and also receives Russian gas via Ukraine.
(Reporting by Guy Faulconbridge and Vladimir Soldatkin in Moscow, Jason Hovet in Prague; writing by Nina Chestney; editing by Jason Neely)
The article discusses the end of Russian gas supply to Europe via Ukraine and its implications.
Austria and Slovakia are the main countries affected by the end of the gas supply.
The EU can replace Russian gas with liquefied natural gas and non-Russian pipeline imports.
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