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Ukraine Forces a Halt to Flow of Natural Gas From Russia to Europe
A transnational pipeline was shut down on Wednesday after Kyiv refused to renew an agreement that allowed for the transit of Russian gas through its territory.
Marc SantoraAndrew Higgins and Mike Ives
Marc Santora reported from Kyiv, Ukraine, and Andrew Higgins from Warsaw.
The flow of natural gas through a major pipeline from Russia to Europe was cut off early Wednesday after Ukraine refused to renew an agreement that allowed for the transit of Russian gas through its territory, according to officials in both countries.
The move to suspend the flow of gas through a pipeline that had carried Soviet and then Russian gas to Europe for decades is part of a broader campaign by Ukraine and its Western allies to undermine Moscow’s ability to fund its war effort and to limit the Kremlin’s ability to use energy as leverage in Europe.
“This is a historic event,” Ukraine’s energy minister, Herman Galushchenko, said in a statement. “Russia is losing markets, it will suffer financial losses.”
The pipeline through Ukraine, built in the Soviet era to carry Siberian gas to European markets, is Russia’s last major gas corridor to Europe following the 2022 sabotage of the Nord Stream pipeline to Germany, possibly by Ukraine, and the closure of a route through Belarus to Poland.
While the move could substantially reduce Russia’s revenue from gas sales, it also carries risks for Ukraine. Military analysts said that Moscow could choose to bomb Ukraine’s vast network of pipelines, which it has largely spared from attack over the past three years, now that it has little incentive to leave them unharmed.
Slovakia, one of the European countries that most depends on Russian gas, had also threatened retaliation against Ukraine after Mr. Zelensky had announced plans on Dec. 19 to shut the pipeline.
Because the expiration of the gas transit deal was anticipated and prepared for by European countries, it was not expected to have an immediate effect on prices, analysts said.
The Russian energy giant, Gazprom, issued a statement early on Wednesday confirming that it was no longer sending gas from Siberia through the pipeline.
Even before the move, Europe had sharply reduced its consumption of Russian gas in response to Moscow’s invasion of Ukraine nearly three years ago. Volumes through the Ukrainian transit pipeline had fallen to around a quarter of their prewar levels.
Besides Slovakia, Hungary, Austria and several Balkan countries had still used Russian gas delivered through Ukraine, but experts say gas in storage facilities and alternative supplies should prevent any immediate disruptions to electricity and heating in these countries.
More vulnerable is Moldova. In December it declared a state of emergency amid fears that an end to supplies of Russian gas through Ukraine would endanger its main source of electricity, a gas-fueled power plant in the breakaway Russian-speaking region of Transnistria.
Gazprom warned Moldova this week that it would halt all gas deliveries on Jan. 1 even if the pipeline through Ukraine kept working, citing a long-running dispute over unpaid bills. Immediately hit by the shutdown was Transnistria, a sliver of Moldovan territory next to Ukraine that, with support from Moscow, declared itself an independent microstate after the 1991 collapse of the Soviet Union.
The energy company in the breakaway region told its customers on Wednesday that it would stop supplying gas for heating to private houses in cities, villages and towns. The company will provide gas for cooking “until the pressure in the network drops to a critical level,” it said in a statement on Telegram.
That Russia would risk hurting its own proxies in Transnistria, which has been occupied by Russian troops for more than three decades, is a measure of how the war in Ukraine has altered Moscow’s priorities.
Ukraine, too, has faced difficult choices. Struggling to withstand relentless Russian assaults both on the front and directed at its energy grid, Kyiv appears to have decided that an opportunity to deliver an economic blow to the Kremlin by reducing its earnings from gas exports outweighed the potential risks.
“We won’t allow them to earn additional billions off our blood,” Mr. Zelensky said when he announced the decision earlier this month to shut down the pipeline.
Stopping the flow of Russian gas through Ukraine is part of a broader battle being waged over global energy supplies as Kyiv and its allies seek ways to cut into the oil and gas profits at the heart of the Russian economy.
It “underscores just how much the European political and energy landscape has changed since Russia launched its full-scale invasion of Ukraine in 2022,” Bota Iliyas, a senior analyst at PRISM, a strategic intelligence firm, said before the shutdown.
Russia spent more than half a century expanding its share of the European market, and the main conduit was the Soviet-era Urengoy-Pomary-Uzhgorod pipeline from Siberia to Ukraine’s border with Slovakia. It brings the Siberian gas via the town of Sudzha — which is now under control of Ukrainian military forces — in Russia’s Kursk region.
At its peak, Russia supplied nearly 40 percent of imported gas consumed in Europe.
While most E.U. nations stopped importing natural gas that arrived by pipeline from Russia immediately after the full-scale invasion, it was only in June that Brussels put in place sanctions aimed at squeezing Russia’s profits from the sale of liquefied natural gas, which is mostly transported by ship.
As of December, the pipeline through Ukraine accounted for only about 5 percent of the European Union’s gas imports, analysts said.
An analysis by the E.U. executive arm, the European Commission, first reported by Bloomberg last month, found that there were alternative supplies available, and forecasts suggested the impact on prices would be minimal.
Targeting Russian energy sales has obvious geopolitical implications as well as economic costs.
As Ukraine prepared to stop the flow of gas, Prime Minister Robert Fico of Slovakia traveled to Moscow in December to meet with President Vladimir V. Putin.
The trip was a blow to European unity in keeping the Kremlin isolated and a clear signal that Moscow would use any avenue available to stay connected to the European market.
As soon as Mr. Fico returned to Bratislava, he threatened to cut Ukraine off from vital energy supplies it needs to sustain its battered power grid, which relies on power imported from the European Union to function after years of Russian bombardment.
About 19 percent of the electricity Ukraine imports from the Europe Union flows through Slovakia, according to Ukrainian officials.
Mr. Zelensky said Mr. Fico was doing Moscow’s bidding by opening a “second energy front” in the war. “We are fighting for lives, Fico is fighting for money,” Mr. Zelensky said, in perhaps his harshest rebuke of a European leader since the start of the war.
Mr. Galushchenko, Ukraine’s energy minister, said that halting electricity supplies to Ukraine would violate European regulations, and Kyiv has issued an appeal to Brussels to block the move.
At the same time, Ukraine is negotiating with other European allies, including Poland, to import more power and offset any action Slovakia might take.
Ukraine’s refusal to renew the agreement that allowed for the transit of Russia gas is not expected to have much economic impact on Kyiv, which did not make a significant profit from the transit fees, analysts said.
But it was likely to deal another blow to Gazprom, the Kremlin-controlled energy giant that recorded a net loss of $7 billion in 2023, its first annual loss since 1999, largely a result of being driven out of E.U. gas markets.
“Clearly, from a Russian perspective, the major argument in favor of sustaining the Ukrainian transit route is that this will permit Gazprom to obtain $6.5 billion in revenues,” Alan Riley, a specialist in energy law and competition, wrote in an analysis for the Estonian Centre for Defense and Strategy, a research institution.
Ukraine has been working to decrease its own dependence on Russia to meet its energy needs and recently announced that it had imported liquefied natural gas from the United States, via Greece, for the first time.
“Cargoes like this are not only providing the region with a flexible and secure source of power, but are further eroding Russia’s influence over our energy system,” Maxim Timchenko, the head of Ukraine’s largest private utility, DTEK, said in a statement.
Marc Santora has been reporting from Ukraine since the beginning of the war with Russia. He was previously based in London as an international news editor focused on breaking news events and earlier the bureau chief for East and Central Europe, based in Warsaw. He has also reported extensively from Iraq and Africa. More about Marc Santora
Andrew Higgins is the East and Central Europe bureau chief for The Times based in Warsaw. He covers a region that stretches from the Baltic republics of Estonia, Latvia and Lithuania to Kosovo, Serbia and other parts of former Yugoslavia. More about Andrew Higgins
Mike Ives is a reporter for The Times based in Seoul, covering breaking news around the world. More about Mike Ives
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