Russia has characterized its gas sales to European countries as increasingly complicated, particularly as the current transit agreement with Ukraine approaches its expiration at the end of the year. This situation follows discussions between President Vladimir Putin and Slovak Prime Minister Robert Fico.
Key Highlights:
Ukraine’s Decision:
Ukraine has announced it will not renew the five-year transit deal for Russian gas, citing a desire not to support Moscow’s military efforts.
This deal is critical, accounting for approximately 50% of Russia’s total pipeline gas exports to Europe.
Impact on Europe:
Slovakia, Italy, Austria, and the Czech Republic are expected to be significantly affected by the end of this transit deal.
Gazprom, Russia’s state-controlled gas company, also exports gas to Europe via the TurkStream pipeline under the Black Sea.
Statements from Officials:
Kremlin spokesman Dmitry Peskov noted the discussions with Fico did not yield clear solutions regarding gas supplies post-expiration of the Ukraine deal.
Fico confirmed that while Russia expressed a willingness to continue supplying gas, logistical challenges would arise once the transit agreement ends.
Slovakia’s Position:
Slovakia claims it has diversified its gas contracts and is not overly reliant on Russian supplies, although losing the Ukraine route could increase costs.
The main gas buyer in Slovakia, SPP, has secured contracts with companies like BP, ExxonMobil, Shell, Eni, and RWE.
Market Reactions:
The benchmark gas contract at the Dutch TTF gas hub rose by 1.52 euros, reaching 45.33 euros per megawatt hour as of 1443 GMT.
Ukrainian Concerns:
Ukrainian President Volodymyr Zelenskiy criticized Fico for not prioritizing the end of Slovakia’s dependency on Russian gas, labeling it a significant security issue for Europe.
Zelenskiy suggested that a renewal of the transit deal could be possible, but only under the condition that Russia would not receive payment until after the war, a stipulation Moscow is unlikely to accept.