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EU sees no need to extend deal on Russian gas transit via Ukraine

A view shows the Orenburg gas processing plant of Gazprom in the Orenburg Region, Russia September 1, 2023. REUTERS/Alexander Manzyuk/File Photo
A view shows the Orenburg gas processing plant of Gazprom in the Orenburg Region, Russia September 1, 2023. REUTERS/Alexander Manzyuk/File Photo

The European Union sees no need to extend an agreement to transport Russian gas to Europe via Ukraine, ahead of the contract’s planned expiry at the end of the year, the bloc’s energy policy chief said on Thursday.

Energy commissioner Kadri Simson said the EU’s analysis indicated that countries served by the gas transit route – which include Austria, Italy and Slovakia – would be able to source alternative supply.

“We have no interest to prolong the trilateral gas transit agreement with Russia, which will expire by the end of this year,” Simson told an EU Parliament committee meeting.

“Based on our preliminary analytics, there are alternative solutions to supply these countries who still receive some gas through the Ukrainian route,” she said.

Europe is attempting to rid itself of Russian gas imports, after Russia slashed gas deliveries to Europe since its Feb. 2022 invasion of Ukraine.

Europe receives around 12 billion cubic metres (bcm) of gas per year via Ukraine, according to S&P Global Commodity Insights. Russia supplied Europe with 155 bcm of gas per year before the Ukraine war.

Analysts have said an end to the Ukraine transit deal could cause European gas prices to rise slightly, but would not compromise Europe’s overall energy security.

EU countries have invested heavily in liquefied natural gas (LNG) and renewable energy to replace supply from Moscow. A sharp drop in gas demand – partly caused by weak industrial activity – has also helped.
Under the five-year pipeline transit agreement between Moscow and Kyiv, Russia exports gas to Europe via Ukraine and pays Ukraine for the use of its pipeline network.

Ukraine has said it will not enter into talks with Russia on extending the deal. Kremlin spokesman Dmitry Peskov said last month Russia would find alternative routes to export its gas if the Ukraine deal is not extended.

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