EU countries could face higher energy prices unless Kiev prolongs its contract with Gazprom, according to Dmitry Peskov
The current contract between Moscow and Kiev expires in 2024
The termination of Russian gas transit through Ukraine will seriously hit consumers in the EU, Kremlin spokesman Dmitry Peskov told journalists on Wednesday.
Ukrainian leader Vladimir Zelensky said on Tuesday that Kiev would not extend its gas transit agreement with Moscow, which expires at the end of 2024.
The Ukrainian decision could result in higher prices for European consumers who want to buy more affordable gas, Peskov stated.
“They [Europeans] will have to pay much more for gas from other suppliers, including for the US liquefied natural gas (LNG), which will make the [European] industry less competitive,” Peskov said.
The Kremlin spokesman, however, noted that there are also alternative routes for Russian gas supplies to the bloc, including via a planned Turkish hub.
“Work is underway on this matter,” Peskov stated.
Brokered by the EU, the five-year deal between Kiev and Moscow, signed in 2019, provides for Russian energy giant Gazprom to transit 65 billion cubic meters (bcm) of gas through Ukraine in 2020, and 40 bcm annually between 2021 and 2024.
“The agreement with Russia will not be prolonged, that’s it,” Zelensky told a press conference on Tuesday, adding that after the contract expires Ukraine will decide jointly with the EU on the transit of Russian gas through its territory. Ukrainian Energy Minister German Galushchenko confirmed earlier that Kiev had no plans to prolong the deal.
Gazprom, once the EU’s main gas provider, dramatically reduced its exports to the bloc in 2022, following the sabotage of the Nord Stream pipelines.
Ukraine-related sanctions introduced by Brussels against Russia have not targeted pipeline gas supplies so far, but many members, including Poland, Bulgaria, Finland, the Netherlands, and Denmark have halted their imports voluntarily. However, several EU nations, including Austria, Slovakia, the Czech Republic, and Italy are still importing Russian pipeline gas.
There have been concerns that flows could stop prematurely after Kiev’s military incursion into Russia’s Kursk Region, where the gas transit point into Ukraine, Sudzha, is located. Last year, Gazprom supplied about 15 bcm of gas to the EU via the route, which amounted to 4.5% of the bloc’s total consumption.
Gazprom reported earlier that gas transit through Sudzha was continuing in line with contracted volumes.
Bloomberg said citing sources that European officials were in talks with Ukraine to keep Russian gas flowing next year.
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