Ukraine halts transit of Russian gas to Europe after prewar deal expired

KYIV: Ukraine on Wednesday halted Russian gas supplies to European customers that pass through the country, almost three years into Moscow's all-out invasion of its neighbour, after a prewar transit deal expired.

Ukraine's energy minister, Herman Halushchenko, confirmed on Wednesday morning that Kyiv had stopped the gas flows “in the interest of national security.”

“This is a historic event. Russia is losing markets and will incur financial losses. Europe has already decided to phase out Russian gas, and (this) aligns with what Ukraine has done today,” Halushchenko said in an update on the Telegram messaging app.

Russia's Gazprom said in a statement on Wednesday morning that it had been “deprived of the technical and legal ability to supply gas for transit through Ukraine,” due to Ukraine's refusal to extend the deal.

Even as Russian troops and tanks moved into Ukraine, Russian natural gas kept flowing through the country's pipeline network — set up when Ukraine and Russia were both part of the Soviet Union — to Europe, under a five-year agreement that ran through the end of last year. Gazprom earned money from the gas and Ukraine collected transit fees.

Before the war, Russia supplied nearly 40 per cent of the European Union's pipeline natural gas. Gas flowed through four pipeline systems, one under the Baltic Sea, one through Belarus and Poland, one through Ukraine and one under the Black Sea through Turkey to Bulgaria.

After the war started, Russia cut off most supplies through the Baltic and Belarus-Poland pipelines, citing disputes over a demand for payment in rubles. The Baltic pipeline was blown up in an act of sabotage, but details of the attack remain murky.

The Russian cutoff caused an energy crisis in Europe. Germany had to shell out billions of euros to set up floating terminals to import liquefied natural gas that comes by ship, not by pipeline. Users cut back as prices soared. Norway and the US filled the gap, becoming the two largest suppliers.

Europe viewed the Russian cutoff as energy blackmail and has outlined plans to completely eliminate Russian gas imports by 2027.

Russian gas currently accounts for about 8 per cent of Europe's supply. The Ukrainian transit route served EU members Austria and Slovakia, which long got the bulk of their natural gas from Russia but have recently scrambled to diversify supplies.

Gazprom halted supplies to Austria's OMV in mid-November over a contractual dispute, but gas flows through Ukraine's pipelines continued as other customers stepped in.

Slovakia this year inked deals to begin buying natural gas from Azerbaijan, and also to import US liquefied natural gas through a pipeline from Poland.

Natural gas is used to generate electricity, power industrial processes, and in some cases to heat homes.