Headline:
Ukraine Vows to Become ‘Gas Hub’ Despite Stopping Russian Fuel Transit; Warns of EU Treaty Violation
Article:
Ukrainian Prime Minister Denys Shmyhal has declared that, unlike gas, Ukraine cannot halt the transit of oil and will transform into a "gas hub" for Europe. Speaking to the Verkhovna Rada, Shmyhal reaffirmed that Ukraine does not plan to extend the transit of Russian gas, stating, "We didn’t plan and don’t plan to sign any contracts for the extension of Russian gas transit."
However, Shmyhal warned that stopping oil transit via the "Druzhba" pipeline would directly violate Ukraine’s Association Agreement with the EU. He emphasized, "Oil transit shutdown will be a direct violation of Ukraine’s contractual commitments under the Energy Charter Treaty and the EU Association Agreement."
The prime minister added that such a move could lead to international arbitration from countries like Hungary, Slovakia, and the Czech Republic, potentially resulting in substantial financial penalties.
Shmyhal did not clarify why oil transit is different from gas transit, but his stance aligns with the European Commission’s stance that Central and Eastern European countries can import sufficient gas, albeit at higher prices. Conversely, alternatives to Russian oil, mainly imported via the Druzhba pipeline, are insufficient.
The Ukrainian prime minister expressed plans to turn Ukraine into a "gas hub" for Europe, stating, "The Ministry of Energy and Naftogaz have been tasked with prioritizing the development of the ‘Ukraine – Gas Hub of Europe’ concept."
While Ukraine possesses significant gas storage capacity, the $30 billion worth of storage facilities inherited from the Soviet Union has seen a drastic decrease in usage since the start of Russia’s military offensive. The January 2024 reserves stood at just 1 billion cubic meters (bcm), a fraction of the previous years.
Meanwhile, amidst attempts to restart oil transit, Slovakia’s Prime Minister Robert Fico met with EU Energy Commissioner Dan Jørgensen in Brussels. They agreed to create a high-level working group to explore options for restarting Russian oil transit through Ukraine.
Earlier, Ukrainian President Volodymyr Zelensky had categorically rejected Fico’s proposal to resume Russian oil transit, accusing Fico of personal interest in Russia’s supplies. In response, Slovakia threatened to cease electricity supplies to Ukraine, reduce support for Ukrainian refugees, and veto EU decisions.
Fico has estimated that the EU will incur additional costs of €120 billion over two years due to the halt in Ukrainian oil transit, primarily due to rises in gas and electricity prices.