Energy Ministry rules out extension of Russian gas transit agreement

Ukrainian Energy Minister Herman Halushchenko has ruled out any commercial agreements that would allow Russian gas to continue transiting through pipelines in Ukraine after the expiration of the current agreement at the end of the year.

Source: Bloomberg

Bloomberg notes that both the EU and Ukraine had previously stated that they would not renegotiate the existing contract, but some market participants are optimistic about the possibility of private agreements regarding fuel delivery within the trading bloc.

Halushchenko denied this possibility on 5 March. 

"I don’t see the possibility. There are not any possible solutions on the table," he said. 

"We are ready to stop this. If someone said that it’s a critical issue for survival during the winter, that it is an issue of security of supply, that’s one situation. But this isn’t currently the case," added Halushchenko.

Instead of continuing to purchase Russian gas, the head of the Ministry of Energy called on more European countries to store fuel in Ukraine's underground storage facilities. Ukraine can offer to store 15 billion cubic metres of gas, exceeding the 14 billion cubic metres of Russian fuel that transited through Ukraine last year. 

"I think that’s fair. Don’t say that we can’t live without Russian gas," the minister added.

Background:

• Earlier reports indicated that the European Commission has no intention of engaging with Russia to extend the transit of Russian gas to European countries through Ukraine. Instead, it will take all necessary measures to eliminate dependence on Russian gas.

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