Title: Russia Explores Turkey Route as Ukraine Transit Uncertainty Looms
As the existing gas transit contract between Russia and Ukraine nears its end in late 2024, the future of Russian gas supplies to Europe via Ukraine hangs in the balance. This comes as Ukraine insists on guaranteed funds not being used to finance its conflict with Russia, while Moscow maintains that it won’t renew the contract. Here’s what this pivotal moment means for Europe’s gas scenarios.
Current Gas Supply Volumes and Routes
Gas supplies from Russia via Ukraine have been scaled back, with only around 15 billion cubic meters (bcm) supplied in 2023—about 8% of peak volumes. Russia’s market share in Europe has been dwindling, reaching a low of 16% in 2022, behind Norway, the U.S., and Qatar, due to geopolitical tensions. Despite the reduced volumes, global gas price fluctuations like those in 2022 can still impact European markets.
The ‘Уренгой-Помары-Ужгород’ pipeline remains the principal route for Russian gas supplies to Europe, which then branches out to countries like Sloakia, the Czech Republic, and Austria. Other routes such as ‘Ямал-Европа’ and Nord Stream remain unavailable, with only the Turkish route left as an alternative.
Why Ukraine’s Route Still Matters
Ukraine benefits significantly from the transit fees, earning around $1 billion annually, while Russia has managed to boost its 2024 gas exports despite facing sanctions. Although facing economic challenges, ‘Газпром’ reiterates its willingness to extend the agreement, though Ukraine stands firm on its stance.
Way Forward: Turkey Route‘s Limitations and Alternative Sourcing
In the event of halted gas transit via Ukraine, Russia may reroute some of its supplies through Turkey. However, this option is constrained by Turkey’s limited pipeline capacity. Meanwhile, the EU and Ukraine seek Azeri mediation in talks with Moscow on gas transit.
Staying Informed
As the 2019 gas transit deal between ‘Нафтогаз України’ and ‘Газпром’ expires at the end of 2024, Europe continues to receive Russian gas through Ukraine. Keeping tabs on the evolving situation is crucial for understanding potential shifts in Europe’s gas dynamics.
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