No More Russian Gas Through Ukraine – But What Happens Next?
On Jan. 1, Ukraine halted the transit of Russian gas to Europe through the Druzhba, Soyuz and Yamal-Yevropa pipelines. The names of these pipelines – drawn from Soviet-era words meaning “friendship”, “union” or “brotherhood” – are, in all their irony, the remnants of a 60-year-old gas transit friendship.
Until any new deals are made, most gas flowing through Ukrainian pipelines, aside from a tiny share of imports from Hungary and Moldova, will be Ukraine-produced gas.
“Compared to the volumes of Russian gas we used to transport – over 40 million cubic meters per day – the current imports, fluctuating at around one million cubic meters, are insignificant figures,” Mykhailo Svyshcho, natural gas market observer at ExPro Consulting, told Kyiv Post.
Russia’s strategy to weaponize gas supplies appears to have backfired, causing losses for its state-owned gas giant Gazprom. For its part, Europe has switched to Norwegian gas and liquefied natural gas (LNG), though it has not entirely given up its dependence on Russian LNG.
The Ukrainian gas transport system currently appears to be operating well, although Ukraine could be about to face financial and human capital losses in the gas transport system, making it important to update its sector strategy quickly.
What next for Ukraine?
The last 41 million cubic meters of Russian gas flowed through Ukrainian pipelines on Dec. 31, 2024, according to Gas Transmission System Operator of Ukraine (GTS) data.
That was only a minority of the total flow, with 110 million cubic meters of Ukrainian domestically produced gas also transported in the system, keeping it busy.
Kyiv Post previously reported that Ukraine produced 13.9 billion cubic meters of commercial gas in 2024, and 13.2 billion cubic meters (466 billion cubic feet) in 2023. Ekonomichna Pravda wrote that, thanks to warmer weather and reduced consumption, it was enough for the winter of 2023-2024 without relying on Russian gas imports.
Fewer transmission facilities will now be needed for gas transportation. Some 32 compressor stations have been closed according to Svyshcho, although they can apparently be restarted if necessary.
A key risk is that of layoffs among staff involved in the maintenance of closed compressor stations. To avoid this, according to Svyshcho, Ukraine’s government should optimize the network and decide which routes and sections of the gas transport system to use. He also believes that GTS Operator should purchase technical gas to maintain volumes of transit and keep facilities working.
“Maintaining the entire workforce, all these compressor stations, and the entire infrastructure when no transit is planned, is simply impractical,” he said.
The absence of a major importer could jeopardize GTS Operator revenues since gas transit was the primary source of income for the state-owned company before 2025.
In 2023, GTS Operator earned Hr. 36 billion ($925 million) in sales and Hr.11.3 billion ($290 million) in net revenues, according to the company’s financial statements for 2023 in an analytical system YouControl. Whilst financial statements for 2024 are not yet finalized, GTS Operator expects Hr.42.1 billion ($1 billion) in sales and Hr.17.6 billion ($419 million) for the last year.
But now, without Russian transit, GTS Operator is expected to earn only half this amount, leaving almost zero net profits, GTS Operator CEO Dmytro Lyppa said during parliamentary hearings on Thursday.
“We can use [transportation systems] for future exports as soon as we increase domestic gas production at adequate volumes, ex-CEO of GTS Operator Serhii Makohon told Kyiv Post. “There is also biomethane and hydrogen,” Makohon added,
The Carnegie Russia Eurasia Center in Berlin stated that Ukraine does not import much gas because “Ukrainian industry and gas-fired power generation were largely destroyed during the war.”
The gas-fired power plants – yes, but the gas industry – no. Ukraine’s gas storage facilities are located in regions that have suffered less damage and fewer strikes, despite the aggressor’s best attempts.
“The vast majority of storage facilities – 11 out of 13 – are located in the western and northern parts of Ukraine (94% of total storage capacity, i.e. just over 30 bcm of natural gas),” the Institute of Central Europe wrote.
According to Kyiv Post sources, the war risk represents a key “stop sign” for foreign investors. Ukraine has the lowest tariffs for gas storage in Europe, but it may only be of interest to Western traders after the war ends, Makohon said.
There is a so-called vertical gas corridor where gas can be transported through Romania and Moldova which can be used for this purpose.
What next for Russia?
Due to losing the European market, Russia’s Gazprom reported $7 billion in losses in 2023, Radio Liberty wrote. These are the first negative financial results for the state-owned giant since 1999.
Russia will lose approximately $6.5 billion in annual profits, according to former Assistant to the Secretary of Defense for Public Affairs John Kirby. The Carnegie Russia Eurasia Center paints a more optimistic picture, suggesting that Gazprom will lose merely 10% of revenues and less than half of gas segment business volumes.
The Russian state giant has already refocused on other markets.
“In 2025, Gazprom will export 38 billion cubic meters to China, about 25 billion cubic meters to Turkey, and 15 billion cubic meters to Europe via Turkish Stream through the Black Sea… Ukrainian transit would make up about 16% of this export portfolio. The volume is noticeable, but not fundamental,” the Carnegie Russia Eurasia Center wrote.
Fundamental or not, Gazprom is set to lay off 1,600 out of 4,100 staff in its St. Petersburg central office, as recently reported by Kyiv Post.
What’s next for Europe?
The European Commission had been preparing to unplug from Russian gas for more than a year, the institution told Suspilne earlier this month. Its key tool to solve the problem is LNG.
“European gas infrastructure is sufficiently flexible to ensure the supply of non-Russian gas to Central and Eastern European countries via alternative routes,” the EU Commission wrote in reply to Suspilne’s enquiry.
Hungary and Slovakia procrastinated over alternative sources, blaming Ukraine for the transit halt. Slovakia’s Prime Minister Robert Fico said that Ukraine’s cessation of Russian gas transportation has cost it €500 million in transit fees and €1 billion in higher gas prices, EUActiv reported.
Fico also previously threatened to cut electricity flows to Ukraine and reduce aid for its refugees. But on Jan. 8, he announced that Slovakia had secured a deal with Russian President Vladimir Putin to obtain gas from Russia through Hungary.
Moldova has unplugged its gas from Russia but will need to solve a problem with Gazprom completely cutting the gas from Transnistria due to an alleged debt.
But for the EU, unplugging from Russian gas has not meant completely unplugging from Russian LNG.
The European Union’s 27 countries imported 837,300 metric tons of LNG from Russia in the first 15 days of 2025.
“That marks a record high, up from the 760,100 tons brought in during the same period last year, fueling concerns that Western nations aren’t doing enough to squeeze Russian funds as Moscow’s war enters its fourth year,” according to Politico.
Russia is the second largest supplier to Europe after the US, Ukrainian energy think tank Dixi Group estimated. Most of it is bought by Spain, Belgium and France, delivering monthly profits of $1 billion.
Europe has already suffered from oil price hikes that spiked Eurozone inflation and an economic shock after Russia invaded Ukraine in 2022. Can such a dependence again bring Russian economic weapons to the EU? Time will show.
Can anywhere else replace Russian supply?
Azerbaijan plans to increase gas production at the Absheron field from 1.5 billion to 5 billion cubic meters annually and to extract the first so-called deep gas from the Azeri-Chirag-Gunashli field in 2025, Kyiv Post previously wrote.
It represents a possible substitute, but Azerbaijani’s capacities are not sufficiently well-developed to produce the amount of gas Europe needs, Svyshcho told Kyiv Post,
“Azerbaijan supplies 12 billion cubic meters – compare it to 15 billion transported through Ukraine in 2024. That is almost as much as Russia transported through Ukraine. It is quite significant,” he said.
Algeria, Qatar and Libya supply 10% of the total volumes of LNG being delivered to Europe, but Svyshcho noted that they have no plans to increase supply.
Perhaps US President Donald Trumps’s mantra to “drill baby drill,” and recent statements about forcing a decrease to oil prices may put an end to Russia’s energy weaponization?
Source: Olena Hrazhdan
For the Record: Joint Statement by Presidents of Ukraine and Moldova
President of the Republic of Moldova Maia Sandu made a visit to Ukraine upon the invitation of President of Ukraine Volodymyr Zelensky. The Presidents of Ukraine and the Republic of Moldova had talks, following which they:
Emphasized the importance of the relationship between Ukraine and the Republic of Moldova, based on the principles of good neighborliness, shared democratic values, and respect for international law. Furthermore, agreed to enhance collaboration on initiatives that will strengthen the partnership between the two states;
Agreed to further intensify their efforts aimed at developing solid and comprehensive relations between Ukraine and the Republic of Moldova, based on mutual trust, respect, and solidarity; reaffirmed in this context their commitments to a practical, predictable, forward-looking agenda of cooperation between Ukraine and the Republic of Moldova, to be pursued in a constructive and mutually beneficial spirit;
Confirmed unconditional support and commitment to the sovereignty, independence, unity, and territorial integrity of both states within their internationally recognized borders;
Affirmed the Republic of Moldova’s full solidarity with Ukraine and its people, who are courageously and legitimately fending off Russia’s war of aggression, and agreed to sustain practical assistance to Ukraine as long as may be necessary to put in place conditions for restoring comprehensive, just and lasting peace for Ukraine and strengthen Europe’s security;
Underscored the Republic of Moldova’s multidimensional assistance in meeting the needs of Ukraine and its people since the first days of Russia’s illegal, unprovoked, and unjustified full-scale military invasion of Ukraine, recognizing the importance of continuing humanitarian assistance and pledging to enhance collaborative efforts to identify the necessary resources and humanitarian support to those affected by Russia’s war of aggression against Ukraine, including displaced Ukrainians in Moldova;
Called for the withdrawal of Russian troops from all temporarily occupied territories of Ukraine and urged the international community to ensure robust security guarantees for Ukraine;
Strongly condemned the deliberate and systematic Russian attacks against Ukraine’s civilian infrastructure, causing numerous casualties among the civilian population and constituting a flagrant violation of international humanitarian law. These attacks also threaten Moldova’s citizens by violating its sovereign airspace, with drones landing on Moldovan soil. Such actions are unacceptable and underscore the necessity for immediate and coordinated efforts to ensure Ukraine’s reliable and effective defense;
Reaffirmed support for the Peace Formula, which is the only viable and effective mechanism to restore just and lasting peace and to end Russia’s war of aggression against Ukraine in accordance with the norms and principles of international law;
Emphasized the fact that an effective sanctions policy is a key factor limiting Russia’s capacity, means and resources to fund its war against Ukraine. Therefore, robust sanctions are not only a key deterrent but also an indispensable instrument for restoring peace in Ukraine and across Europe;
Concurred on the significance of the special international tribunal to ensure accountability of the Russian Federation for the war of aggression against Ukraine;
Underlined that Russia’s full-scale aggression against Ukraine and continued violations of international norms, condemned by the overwhelming majority of the international community via the General Assembly UN resolutions, raise questions about Russia’s role as a mediator and guarantor in a wide range of conflict situations, including the Transnistrian conflict;
Reiterated the shared commitment to the peaceful, negotiated reintegration of the Republic of Moldova and called for the unconditional withdrawal of Russian troops from the Transnistrian region;
Strongly condemned the deliberate interruption of gas supplies by the Russian Federation to the Transnistrian region of the Republic of Moldova, which has triggered a humanitarian crisis. The parties reaffirmed their commitment and capacity to provide urgent and concrete solutions to address the energy needs of the Transnistrian region’s residents, prevent further escalation of the crisis and restore basic services;
Expressed a resolute readiness for joint steps aimed at strengthening energy security and diversifying energy sources to ensure stability in energy supply and maintain independence from external influences;
Denounced the unprecedented subversive activities and hybrid attacks by Russia against Moldova, particularly in the context of last year’s presidential elections and referendum. These actions demonstrate a clear intent to systematically interfere in democratic processes, aiming to destabilize the wider region and undermine stability in Europe;
Committed to strengthening cooperation to counter further hybrid threats and disinformation;
Reaffirmed mutual determination to strengthen practical cooperation between Ukraine and the Republic of Moldova in all spheres of mutual interest. This commitment encompasses enhancing economic ties, fostering cultural exchanges, and collaborating on common security challenges;
Confirmed a resolute commitment to cooperate with the international community to ensure effective and sustainable recovery for Ukraine after Russia’s war of aggression, while working to address the urgent needs arising from the war and rebuild the nation in a manner that fosters resilience and stability;
Highlighted the importance of enhancing connectivity between the Republic of Moldova and Ukraine, which involves developing existing transport infrastructure, facilitating border crossings, removing bottlenecks, and establishing new border crossing points;
Emphasized the importance of using existing cooperation mechanisms within the UN, OSCE, Council of Europe, UNESCO, IAEA, etc., as well as of regional formats – including the trilateral Ukraine-Romania-the Republic of Moldova – with the aim to foster cooperation between the states on security, energy, infrastructure and other projects;
Acknowledged the progress made by both Ukraine and the Republic of Moldova in their pursuit of the strategic goal of full-fledged membership in the European Union. Both states are dedicated to implementing the necessary reforms for European integration and opening all negotiation clusters by the end of 2025;
Stated that Ukraine and the Republic of Moldova are committed to further enhancing their interstate relations based on mutual trust and respect, openness, and comprehensive collaboration for the benefit of the citizens of both states.
See the original here.
Source: Kyiv Post