Seit bald drei Jahren greift Russland die Ukraine beinahe täglich an. Raketen schlagen in Häuser ein und zerstören Straßen. Immer wieder wird gezielt die Energieinfrastruktur bombardiert, um die Bevölkerung im beginnenden Winter zu zermürben. Nur das ukrainische Pipelinesystem ist bisher wie durch ein Wunder weitgehend unbeschadet geblieben.
Das dürfte einen Grund haben: Russland pumpt nach wie vor Gas durch die Ukraine in die EU. Denn dort beziehen einige Länder zum Teil noch erhebliche Mengen des günstigen russischen Pipeline-Gases – vor allem Ungarn, Österreich und die Slowakei.
Für die EU insgesamt hat die Lieferroute durch die Ukraine an Bedeutung verloren; der Brüsseler Denkfabrik Bruegel zufolge steht sie nur noch für fünf Prozent der gesamten Gasimporte. Dennoch hätte ein Ausfall der Lieferungen spürbare Folgen. Entsprechend steigt die Nervosität in den betroffenen Ländern, denn Ende des Jahres läuft der Transit-Vertrag aus, den Russland und die Ukraine vor fünf Jahren geschlossen haben. Ihn zu verlängern, und damit weiterhin direkte Geschäfte mit dem Aggressor zu machen, hat die ukrainische Führung ausgeschlossen.
However, all parties involved have an interest in maintaining transit, which is why negotiations on a new solution have been ongoing for months. For Ukraine, this involves important transit fees, which were recently estimated at around a billion dollars a year. In addition, a new model could continue to offer a certain level of protection for the old but still valuable pipe system. An agreement would also be beneficial for Russia.
In view of severe losses after the loss of many European customers, the state-controlled Gazprom company would like to be able to send at least some gas to the West – also in order to maintain relations with Russia-friendly countries such as Hungary and Slovakia. From their perspective, Russian natural gas is particularly interesting because it is significantly cheaper than liquefied natural gas (LNG), which is often transported over long distances on tankers. In addition to the route through Ukraine, Russia also supplies natural gas to Turkey through the Turk Stream Pipeline and from there on to southeastern Europe. But the capacity of this line is largely exhausted.
It is unclear whether a solution for the Ukraine transit will be reached by the end of the year. In Central Europe in particular, concerns about delivery failures are increasing, most notably in the Republic of Moldova, where parliament has declared a state of emergency due to the possible end of transit and the resulting expected energy crisis. But the route via Ukraine has also played a major role in Austria, Hungary and Slovakia: According to data from the International Energy Agency, they purchased 65 percent of their gas requirements via Ukraine last year. This is unlikely to have changed much this year.
The situation in Austria is similarly relaxed
According to the EU Commission, Slovakia received 70 percent of its natural gas from Russia last year, Hungary 69 percent and Austria 44 percent. Serbia, in turn, covers around two thirds of its gas consumption from Russia – albeit increasingly via routes through Turkey and Bulgaria – and is even increasing its purchases this winter. The growing unrest in the region can be seen in increased travel and other diplomatic activities. The Slovak Prime Minister unexpectedly traveled to Moscow on Sunday and met with Putin there.
The Moscow trip was a reaction to the announced stop of gas transit and Zelensky's call for sanctions against the Russian nuclear program, which would also endanger Kiev's electricity generation in Slovakian power plants, Fico said on social media after the meeting. He also discussed the military situation in Ukraine and the possibility of an early peaceful end to the war with Putin.
At the beginning of December, the Slovakian Minister of Economic Affairs, Denisa Saková, traveled to the Gazprom headquarters in Saint Petersburg at short notice. Fico has also announced that it will come to Moscow for the military parade on May 9 next year to mark “Victory Day,” when Russia celebrates the Soviet Union's victory in World War II.
It is a great benefit for Putin when foreign heads of state, especially from the West, pay their respects to him on this day. Hungarian Prime Minister Viktor Orbán has excellent relations with the Kremlin leader anyway, as does Serbian President Aleksandar Vučić. At a recent Eurasian Economic Forum, Serbian Deputy Prime Minister Aleksandar Vulin announced a new supply agreement with Gazprom. He expects “no problems.”
The situation in Austria is similarly relaxed – even if no more Russian gas comes through Ukraine from January onwards. The partially state-owned energy company OMV even terminated its supply contract with Gazprom, which runs until 2040, in mid-December. The reason for this was that Gazprom had previously stopped deliveries to OMV after the Viennese energy company had offset an outstanding claim of 230 million euros against current deliveries. The reason for this was an arbitration court ruling that awarded OMV damages for failure to deliver via the destroyed Nord Stream pipeline. This gave OMV the leverage to exit the long-term gas contract that has long been criticized.
They come over the winter
Although OMV has no longer received gas from Gazprom since mid-November, there has been no change in Austria's supply of the Russian energy source, officials in Vienna testify. The gas that was previously billed to OMV was bought by others who in turn resold it on the stock exchange. This changed the billing address for Gazprom, but not the delivery address.
Things could change from January onwards. In Austria and the Czech Republic, which imported significantly less Russian pipeline gas in 2023 than the other affected countries, politicians and energy managers are reassuring the public that the gas storage facilities are 85 percent full. Sufficient capacity has also been booked to take other delivery routes via Italy or Germany. This might not prevent short-term price fluctuations on the spot markets. However, since most consumers have signed longer-term contracts, they would hardly notice this.
In the event of a transit stop, all directly affected EU countries could survive the winter, says oil and gas expert at the Carnegie think tank Sergei Wakulenko, who was at Gazprom Neft, the oil division, until Russia's attack on Ukraine in February 2022 of the group. The situation is worst for Slovakia, which hardly has any alternative sources of supply. Gas can also be delivered there from other European countries, but if the winter becomes very harsh, there could definitely be bottlenecks in times of very high consumption, the expert believes.
Even in this case, Western European and German customers are unlikely to face any extreme price jumps. The expectation of the end of transit has already been priced in, says Andreas Schroeder from the energy consulting company ICIS. If it becomes clear at the end of the year that no agreement will actually be reached, prices would probably rise slightly again: “Stopping deliveries via Ukraine transit could result in a medium-term increase of 0.30 euros per megawatt hour for Western Europe and thus also Germany mean, for Slovakia by 0.90 euros and for Austria by 1.30 euros,” estimates Schroeder. Gas prices have recently risen sharply – by around 80 percent since February, from 24 to 43 euros per megawatt hour. This not only has to do with the expected end of transit, but, according to analysts, is primarily due to the fact that demand is higher than ever before due to the rather cold winter, while supply in the global liquid gas market is tight.
The construction of many important export terminals, such as in Plaquemines, USA, is currently delayed. And the most important sales market, China, has significantly increased its imports compared to the previous year. “Two thirds of the world’s LNG is consumed in the Pacific region,” says Schroeder. Through the new liquid gas terminals, Europe is increasingly exposing itself to this “world market characterized by Asia”.
From the perspective of Prague, Vienna and Pressburg (Bratislava), there has so far been another reason for the high prices: the gas storage levy introduced by Germany in 2022, which was intended to pass on the increased costs of gas security to customers. Accordingly, a special fee was charged for every cubic meter of gas at the border transfer points to the Czech Republic and Austria, which caused considerable resentment in both countries. The Czech government cited the fee as a reason why it continues to stick to the comparatively cheaper Russian pipeline gas. Now the Bundestag abolished the levy last Friday by changing the law – because it contradicts “the EU's common efforts” to become independent of Russian natural gas.
Azerbaijan does not have the capacity
How this gas could be routed through Ukraine in the future is still entirely unclear. Little is known about the negotiations that have been going on for months and hardly anything is leaked to the outside world. The likely scenario for the future of transit is a so-called “swap” agreement, i.e. an exchange between Russia and Azerbaijan. The state-owned Azerbaijani oil and gas company Socar could, as a partner of Ukraine, conclude a new transit contract in order to supply Azerbaijani instead of Russian gas through the Ukrainian pipeline system in the future.
However, Azerbaijan does not have the capacity to send the required 16 billion cubic meters that Gazprom will deliver through Ukraine this year to Europe from its own production. Therefore, Baku would have to exchange gas quantities with Moscow: Azerbaijan would receive gas of Russian origin on the Russian-Ukrainian border – the gas routed through Ukraine would then be Azerbaijani on paper. In return, Russia would receive gas that Azerbaijan currently supplies to Turkey and other European countries via the so-called southern gas corridor through Georgia. The gas quantities are roughly comparable.
Vakulenko also believes it is possible that Russia sells its gas to Azerbaijan before the Ukraine transit, but then receives it back at the Ukrainian-Slovak border and resells it to European customers. After all, Russian gas could remain Russian on paper; Azerbaijan would then simply take over the transit and sign the contract with Ukraine.
Setback for Gazprom too
Although these variants would not help the EU to become independent of Russian gas by 2027, as planned, they would be advantageous for Ukraine – because they would mean consistent delivery volumes and fixed, calculable transit fees like currently, both of which are necessary in order to achieve this to keep the huge network of cables in working condition.
Ukrainian President Volodymyr Zelenskyj had most recently shown himself open to deals in August that would involve the transit not of Russian gas, but of “other companies” – “if some of our European partners continue to wish this.” But there is another model in which European customers would flexibly buy Russian gas and book transit capacities with the Ukrainian pipeline operator as needed. In this case, however, it is “very unclear whether Ukraine can maintain its system,” says Carnegie expert Wakulenko. The pipelines would have to be kept constantly ready for large quantities of gas, which would be difficult to achieve if small quantities were to be passed through.
A stop to Ukraine transit would also be a setback for Gazprom. According to Bruegel's experts, $6.5 billion in annual revenue was lost. Wakulenko assumes around $5 billion and around 15 percent of sales. But Gazprom is not threatened with bankruptcy, says the expert; the Kremlin will not allow this. In addition, the company has a “cash cow” in the oil division Gazprom Neft, which is very profitable. But Gazprom urgently needs money to invest in the planned second gas pipeline to China, Sila Sibiri 2.
And China?
After the loss of its main sales market, Europe, Russia has hardly any opportunity to sell its natural gas abroad. The capacities of the few LNG factories that Gazprom owns are not very large. And the liquid gas plants of the private company Novatek, which also supplies the EU, are isolated and not connected to Gazprom's gas fields with pipelines. Russia is counting on selling at least large parts of the gas previously delivered to Europe to China in the future. However, despite considerable efforts by the Kremlin and repeated reports of success by Putin, Moscow and Beijing have not yet agreed on the project.
Apparently China, which is not necessarily dependent on the pipeline, is trying to negotiate the best conditions for itself: Beijing is reportedly demanding a gas price that is roughly on a par with the heavily subsidized Russian domestic market, and would therefore be many times lower than what European customers have been paying Gazprom so far.
