Moscow June 22 2023: Russia could shut off one of the last arteries carrying Russian gas to Europe by the end of next year when Ukraine's supply contract with Gazprom expires, the Financial Times said on Thursday, citing an interview with Ukraine energy minister German Galushchenko.
The chances of Kyiv and Moscow agreeing to a renewal of the five-year transit contract first signed in 2019 were slim, even though the route through Ukraine accounts for almost 5% of Europe's total gas imports, the newspaper reported.
When asked if Ukraine would be prepared to renegotiate the agreement with Moscow after last year's invasion, Galushchenko told FT, "I really can't imagine how it could be bilaterally," adding that Ukraine is preparing for a cut in supplies.
Russian gas giant Gazprom (GAZP.MM) warned in April that Europe's ability to maintain ample gas stocks in the 2023/2024 winter hinges on Asia's demand given "critically low" supplies from Russia.
European gas prices rose last year on Gazprom's threat to cut flows to Moldova, as the supply route, which goes through Ukraine, is the last functioning Russian gas corridor to Europe.
Europe would be relatively prepared for a further slowdown in supply, after adapting to similar cuts in the past by reducing demand and sourcing alternative imports such as liquefied natural gas (LNG), the energy minister told the FT.
The European Union last year invested heavily in LNG imports and adopted regulation to boost storage to fend off any shortage after Russian gas supplies to Europe shrank following Moscow's special military operation in Ukraine.