European energy companies call to preserve gas transit through Ukraine: what does it mean?
19 December 2024 18:08Gas suppliers from four European countries have appealed to European Commission President Ursula von der Leyen to ensure the continuation of natural gas transit through Ukraine after 2024. In particular, the initiative was supported by Slovakia’s largest energy company SPP, as well as representatives of Austria, Hungary, and Italy.
In the text of the appeal, the signatories emphasized that the preservation of Ukraine’s gas transportation infrastructure is critical both for Europe’s energy security and for supporting Ukraine’s economy.
The position of Slovak SPP
Vojtech Ferenc, Chairman of the Board of SPP, said that the termination of gas transit through Ukraine could cause significant economic losses for the region and a significant increase in energy prices.
“Maintaining transit is the most beneficial solution for European gas consumers, as well as for Ukraine, which receives profits from the operation of its gas transportation system. This is an important voice of business, which is directly responsible for the energy security and economy of the region,” Ferenc emphasized.
According to the head of SPP, the cessation of Russian gas supplies through Ukraine could lead to higher transit costs for consumers. For example, the Slovak gas market could lose more than 220 million euros due to higher costs for alternative supplies.
Can Europe provide itself with gas without transit through Ukraine?
European energy companies are calling for the preservation of gas transit through Ukraine, but this prospect is unlikely. This opinion was expressed by energy expert Serhiy Dyachenko.
According to him, European countries have enough resources to provide themselves with gas from alternative sources.
“Norway and other suppliers have already covered the deficit caused by the restriction of Russian gas supplies. In the future, new supply routes will appear, in particular through areas where the construction of gas pipelines was previously impossible. For example, after the situation in Syria stabilizes, new gas supply opportunities will be considered,” explained Sergiy Dyachenko.
The expert emphasized that the issue of preserving Russian gas transit through Ukraine should be resolved in a dialogue with European partners.
“Our allies, in particular Italy, are actively helping Ukraine, and this issue can become part of a common strategy. However, today, in times of war, transportation of Russian gas through Ukraine is impossible. We cannot help the aggressor country to make money,” said Dyachenko.
Dyachenko also noted that further agreements on transit depend not only on economic factors, but also on the horizon of the end of the war.
“As long as the war continues, it is difficult to count on long-term contracts or stability in this matter,” Dyachenko added.
Risks for Europe
The gas transit contract between Russia’s Gazprom and Ukraine’s Naftogaz expires on January 1, 2025. The termination of transit could pose serious challenges for Central European countries such as Slovakia, the Czech Republic, Hungary, and Austria, which are heavily dependent on these supplies.
According to Denisa Sakova, Minister of Economy of Slovakia, in 2025, the European demand for Russian gas transited through Ukraine could reach about 15 billion cubic meters.
Nevertheless, some countries, such as Austria, have been able to partially establish alternative supplies through Italy and Germany, and the country’s gas storage facilities are currently full.
Support for the declaration
The following companies and organizations have signed a joint declaration in support of maintaining gas transit through Ukraine:
- SPP (Slovakia) – Slovenský plynárenský priemysel, a.s.;
- Eustream (Slovakia);
- MOL Hungarian Oil and Gas plc (Hungary);
- MVM Zrt (Hungary);
- Gas Intensive Societa Consortile a.r.l. (Italy);
- The Federation of Austrian Industries (Austria);
- Confederation of Hungarian Employers and Industrialists (Hungary);
- National Union of Employers of Slovakia (Republiková únia zamestnávateľov, Slovenská republika).
The participants of the appeal called on the European Commission and the EU countries to support the preservation of the transit route through Ukraine as a key element of the region’s energy security.
Author – Anastasia Fedor
