President Volodymyr Zelenskyy says Ukraine will not continue to transit Russian gas.
“We will not continue the transit of Russian gas, we will not allow them to earn additional billions on our blood. Any country in the world that can get something cheap from Russia will eventually become dependent on the Russian Federation, whether tomorrow or in a month or a year. This is their policy. Therefore, we will not transit Russian gas,” Zelenskyy said at a press conference in Brussels on Thursday.
Zelenskyy noted that in a conversation with the Prime Minister of Slovakia, he said that if there is not Russian gas, but gas from another country, and there is no payment to Russia until the end of the war, Ukraine is ready to consider this option.
At the same time, Zelenskyy emphasized that Ukraine would not allow additional earnings for Russia.
Slovakia will hold a series of talks starting next week to secure gas supplies from Russia after its current transit contract, which involves Ukraine, expires at the end of this year, Reuters reported on Friday, citing government officials.
“In the coming days, in particular during the Christmas holidays, you can witness extremely intense negotiations at different levels and in different countries, which will begin next week,” Slovak Prime Minister Robert Fico said at a press conference.
Denisa Sakova, Deputy Prime Minister and Minister of Economy of Slovakia, said that the talks would involve the European Commission, Ukraine and EU member states.
Fico said that he sought to ensure the continuation of supplies from the east to avoid additional fees for gas transit from other directions. “We see no reason to pay more for gas than necessary for geopolitical reasons… I believe that even if there is a short-term interruption of supplies from the east, we have enough reserves to find a common solution for several EU countries, and we will keep gas transit through Slovakia, as well as gas transit through Ukraine,” he said.
Reuters notes that Slovak officials have been looking for alternative gas transit schemes through Ukraine that would not require a direct agreement between Ukraine and Russia, but have not reached any agreement.
Slovakia reportedly has a long-term contract with Russia’s Gazprom and would like to keep importing Russian gas through Ukraine, but it will end at the end of 2024, as Ukraine does not plan to extend the transit contract with Gazprom.
Earlier, Hungarian Foreign Minister Péter Szijjártó said that Hungary and Bulgaria had found a legal and financial solution acceptable to the parties to continue the transit of Russian gas through their countries in the face of US sanctions against Gazprombank.
Hungary receives Russian gas through the Turkish Stream pipeline from Russia to Turkey and then transits through Bulgaria to Hungary. Hungary has received the bulk of its gas consumption through this route – this year, more than 7 billion cubic meters.
At the same time, Bloomberg, citing the Bulgarian Ministry of Energy, reports that “only a ‘solution’ to the problem was discussed, which would include Hungary and allow Bulgaria to continue receiving transit fees after the arrival of Russian gas.” Bulgaria has previously warned that it may stop transiting Russian gas to Central Europe if Gazprom does not find a payment solution, the agency reminds.
Ukrgasvydobuvannya JSC (UGV) has launched a new well with a depth of 4202 m and a flow rate of 170 thousand cubic meters of gas per day, the press service of Naftogaz Group reports.
According to the press service, this is the 15th well at the field since the beginning of 2024. Another one is planned to be drilled by the end of the year.
“The new well was drilled in the central part of the field. We plan to drill another one by the end of the year and four more next year. Thanks to the professional and well-coordinated work of all UGV specialists, we have been able to increase production for the second year in a row,” said Naftogaz CEO Oleksiy Chernyshov, as quoted by the press service.
According to Serhiy Lagno, the head of Ukrgasvydobuvannya, this result was achieved due to the successful choice of the well site.
“This was preceded by earlier 3D seismic surveys and their qualitative analysis, preliminary identification of promising horizons, as well as clarification of their capacity,” he explained.
As reported, in January-October 2024, Ukrgasvydobuvannya increased commercial gas production by 6% compared to the same period in 2023 – up to 11.6 bcm. At the end of 2023, commercial gas production amounted to 13.224 bcm, which is 0.679 bcm more than in 2022.
NJSC Naftogaz of Ukraine owns 100% of Ukrgasvydobuvannya shares.
Russian gas producer Gazprom (GAZP.MM), opens new tab said it would send 42.4 million cubic metres of gas to Europe via Ukraine on Tuesday, the same volume as on Monday, while nominations for gas flows to Austria from Slovakia edged up.
The European energy markets have been on edge over a contractual row between Gazprom and Austria’s OMV (OMVV.VI), opens new tab, which led to the Kremlin-controlled firm halting supply to the Vienna-based company on Saturday.
The flows to OMV were stopped after it threatened to impound some of Gazprom’s gas as compensation for an arbitration it had won over the contractual dispute.
Daily flows to Europe via Ukraine have remained around normal levels, however, and gas has continued to flow into Austria.
Nominations, or requests from customers, for flows to Austria from Slovakia were up 6% on Tuesday versus Monday but remained about 12% below levels seen before Gazprom halted supply to OMV.
It was not clear who was buying gas previously intended for OMV.
Nominations to the Czech Republic from Slovakia were roughly in line with levels seen in previous days this month.
Nominations for flows into Slovakia from Ukraine were also little changed while nominations for flows leaving Slovakia were mostly stable, data from transmission system operator Eustream showed.
In January-October 2024, Ukrgasvydobuvannya JSC and Ukrnafta PJSC increased commercial gas production by 6% compared to the same period last year, up to 12.3 bcm, according to the website of Naftogaz of Ukraine.
“Despite the hostilities, our specialists continue to drill new wells and steadily increase gas production. We are doing everything possible to ensure that Ukrainians can continue to use their own fuel during the heating season,” said Naftogaz CEO Oleksiy Chernyshov.
As reported, the consolidated quarterly report of Naftogaz forecasts that the group’s commercial gas production in 2024 will amount to 14.6 billion cubic meters. In February, Chernyshov noted that the group’s goal for this year is to get closer to 15 bcm of production.
NJSC Naftogaz of Ukraine plans to import 2-3 bcm of gas, according to the published memorandum on economic and financial policy for the 5th review of the EFF program with the IMF.
“For the upcoming heating season 2024/25. Ukraine plans to import additional gas for domestic consumption in the amount of up to 2-3 billion cubic meters, while additional gas may be stored by non-residents for the needs of the EU countries in accordance with the baseline scenario,” the document says.
At the same time, it is noted that restrained domestic consumption and growing domestic production limited the need for gas imports in the last heating season.
Regarding import plans for this year’s heating season, it is noted that Naftogaz has secured additional financing for gas imports from the EBRD and bilateral donors.
If Naftogaz faces a liquidity shortage, the government is ready to assess the amount of compensation for the company’s special obligations in 2025 based on its actual documented costs, verified by the State Audit Service and other stakeholders. The relevant calculations will be finalized by the end of August 2025.
“The potential pressure on costs related to gas imports and PSO compensation will be taken into account by adjusting the fiscal balance targets to take into account the above assessment, the results of the audit of the debt of district heating companies (DHCs), available funding, and limited to UAH 60 billion (about 0.8% of GDP),” the document says.
It also notes that the energy sector reform agenda, “as soon as conditions allow,” includes additional gradual increases in gas and electricity tariffs with parallel support for vulnerable consumers, and after the war ends, it will require restoring and strengthening competition in the wholesale and retail gas markets.
It is noted that the government will adopt a roadmap for the gradual liberalization of gas and electricity markets with an implementation plan indicating the timeline for the period after martial law.
As reported, Naftogaz Group CEO Oleksiy Chernyshov said in early October in a commentary to Energoreforma that as of November 1, the company’s purchases of gas in the customs warehouse (CW) mode, which is carried out as a reserve at the expense of the EBRD loan, will be “within 500-600 million cubic meters.”
At the end of 2022, Naftogaz attracted an EBRD loan for EUR 300 million under state guarantees, which created a reserve stock of natural gas in the amount of 748 million cubic meters in the customs warehouse (CU) mode.
A new agreement on the EBRD loan to Naftogaz for EUR 200 million under state guarantees was signed in November 2023. At the time, it was emphasized that it would come into force after the state guarantees were issued. Norway and the Netherlands shared the credit risk with the bank.
The CU regime allows natural gas to be stored in Ukraine’s underground gas storage facilities for three years without paying taxes and customs duties during its further transportation from the country.
