Russia reacts to Ukraine’s rejection to extend gas transit agreement
Date
8/29/2024 8:38:06 AM
(MENAFN) On Wednesday, the Kremlin responded sharply to Ukraine’s decision to not extend its gas transit agreement with Russia, which is set to expire at the end of 2024. Kremlin spokesman Dmitry Peskov warned that this move could significantly impact European consumers, leading to higher gas prices across the continent.
Ukrainian President Volodymyr Zelensky announced on Tuesday that Kyiv would not renew the gas transit deal, which was initially brokered by the European Union and signed in 2019. The agreement allowed for the transit of 65 billion cubic meters (bcm) of Russian gas through Ukraine in 2020 and stipulated annual transits of 40 bcm from 2021 to 2024.
Peskov expressed concern that the termination of this agreement would result in increased costs for European consumers who rely on affordable gas. He indicated that Europeans might face higher prices from alternative suppliers, including liquefied natural gas (LNG) from the United States, which could further erode the competitiveness of European industry.
Despite these concerns, Peskov assured that Russia is exploring other avenues to supply gas to Europe. He mentioned ongoing efforts to develop alternative routes, including a planned Turkish gas hub, which could potentially mitigate the impact of the Ukrainian decision on Russian gas exports.
Ukrainian Energy Minister German Galushchenko confirmed that Kyiv has no intentions of extending the current gas transit deal. Following the contract’s expiration, Ukraine plans to collaborate with the European Union to determine the future arrangements for Russian gas transit through its territory.
This development comes after a significant reduction in Russian gas exports to the European Union in 2022, which followed the sabotage of the Nord Stream pipelines. The situation highlights the shifting dynamics in European energy supply and the broader implications for international gas markets.
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