KEY POINTS
- EU leaders push for a Russian gas transit deal through Ukraine.
- Slovakia warns of rising energy costs without resumed gas supply.
- Cold weather is depleting EU gas storage faster than expected.
The European Union and Ukraine are being urged by European leaders to step up talks about the possibility of resuming the transport of Russian gas through Ukrainian pipelines.
EU leaders urge talks on Russian gas transit via Ukraine
After a five-year transit agreement between Moscow and Kyiv expires, Slovak Prime Minister Robert Fico stated that he is not ruling out the prospect of resuming Russian gas shipments through Ukraine. Citing growing energy prices for Slovakia and the surrounding area, Fico has been putting pressure on Ukrainian President Volodymyr Zelenskyy to resume the transport.
Energy security emerged as a major concern during the special summit of EU leaders held Thursday to discuss Ukraine and European defense.
“There is a 100 billion cubic meter capacity in the pipeline that passes through Slovakia,” Fico told reporters in Brussels. “I want to make every effort to guarantee that it is utilized in the future.”
Moscow open to new gas transit deal with Ukraine
Moscow stated last year that it was willing to negotiate a new gas transit deal with Ukraine. In November, Russia said it was willing to keep sending gas to Europe through Ukraine as long as Kyiv and European parties could agree.
According to Oilprice, Russian Deputy Prime Minister Alexander Novak, who is in charge of Russia’s energy policy, told reporters, “Of course, in my opinion, the European countries that currently receive gas through this corridor are interested in continuing such cooperation,” “We are prepared to provide gas, but a lot relies on the users and the transit nation negotiating.”
Russia’s transit tariffs might cost Ukraine up to $1 billion a year. It intends to raise domestic gas transmission tariffs in order to make up for it. In the meantime, gas sales might cost Russian energy behemoth Gazprom up to $5 billion. Five percent of all gas imports into the EU came through Ukraine.
After two days of declines, European natural gas futures rose to €41.5 per megawatt-hour on Thursday. The EU’s gas storage, which is currently 37.3% full, has been further depleted by heating demand due to forecasts of colder-than-normal weather. This winter, colder temperatures and less wind power generation have caused gas stocks to run out more quickly than anticipated.
