On January 1, kyiv ended the transit of Russian gas to the EU. And this, by refusing to extend a five-year contract with Moscow.
kyiv’s decision to block natural gas flows from Russia to European consumers is expected to lead to an increase in liquefied natural gas (LNG) prices. Just as it would stimulate competition for alternatives between Europe and Asia. This was reported on Thursday January 2, 2025 by Bloombergquoting an energy expert.
Russia was forced to officially suspend gas transit to the EU via Ukraine on January 1. After kyiv insisted it would no longer deal with Moscow or allow Russian energy flows. Despite months of negotiations between the energy giant Gazprom, the Ukrainian Naftogaz and the manager of the gas transport system.
“This will further tighten the LNG market,” declared to Bloomberg Scott Darling, Managing Director of Haitong International Securities. “Supply, particularly for LNG, is limited and we expect a risk of its prices rising this year and next.”
In anticipation of reduced supply, natural gas prices have surged. The benchmark price of European gas ending the year up more than 50%, according to Bloomberg. Stressing that growth had not yet been reflected in the cost of LNG, normally more expensive.
Note that the Ukrainian transit network is connected to the pipeline networks of Moldova, Romania, Poland, Hungary and Slovakia, then extends to Austria and Italy.
-Thus, Slovakia is considered one of the countries most affected by this interruption. Because the country covers almost 60% of its demand thanks to Russian supplies via Ukraine. Moldova could also be affected by this measure. Since the former Soviet Republic produces much of its electricity in a power plant fueled by Russian gas.
However, Russia is still able to supply European consumers with gas via the TurkStream gas pipeline, as well as to ship cargoes by sea in the form of LNG.
TurkStream connects Russia to Turkey via the Black Sea, then continues to the border with Greece. It has two lines, one for the Turkish domestic market and the other for customers in Central Europe, including Hungary and Serbia.
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