From the “YCMTSU” files – Russia still pays Ukraine to transport its natural gas to the EU?

Maybe this has changed in the last few months, but check this headline out from last week:

Explainer: What will happen when the Ukraine gas transit deal expires? | Reuters

“LONDON, June 4 (Reuters) - Ukraine will not extend a five-year deal with Russia's Gazprom (GAZP.MM), opens new tab on the transit of Russian gas to Europe when it expires at the end of the year, prompting recipient countries to seek alternatives.

Since the Ukraine war, Norway has overtaken Russia to become Europe's top pipeline gas supplier and the EU has increased liquefied natural gas (LNG) imports from the U.S. and other countries.”

“The Ukraine gas transit route, agreed upon by Moscow and Kyiv in 2019, enables Russia to export gas to Europe to Ukraine. However, transit volumes dropped 28.5% in 2023, according to Ukraine’s gas pipeline operator.”

Hmm… so Russia is still supplying the EU with LNG and will do so for another 7 months? Interesting. Presumably Ukraine gets/got paid hundreds of millions of dollars to allow the transit of LNG via pipelines crossing Ukraine and Russia is careful not to blow them up!

A few more older articles for context:

From February 2022:

The domino effect of the Ukraine crisis on gas and LNG | Wood Mackenzie

“Russia supplied 168 Bcm to Europe in 2021, down from 191 Bcm in 2019 but still meeting around one-third of demand. Volumes reaching Europe transiting via Ukraine have halved since 2019 but are still 40 Bcm a year – around 8% of total demand. Nord Stream 2, the final step in Russia’s plan to grow its exports to Europe whilst circumventing Ukraine, still awaits final approval from the EU. Germany is the biggest buyer of Russian gas (40 Bcm) but Italy, Austria and Slovakia are most dependent on Ukraine transit gas.”

The US blew up Nordsteam2, so the Ukraine transit route became more important.

This from September 2022:

Russian gas flows across Ukraine jeopardized in transit fee spat – POLITICO

“Ukraine's Naftogaz and Russia's Gazprom are at loggerheads over payments for gas shipments through pipelines across Ukraine — a trade that has continued despite the war between the two countries.”

And another from 2022:

The EU Is Buying up Russian LNG at the Highest Level in 3 Years - Markets Insider (businessinsider.com)

“The EU is purchasing Russian liquefied natural gas at the highest level in three years, according to Bruegel data.

Though the bloc has sanctioned Russian oil and fuel oil, LNG imports are still free-flowing.

The EU snapped up 19.2 billion cubic meters of Russian LNG last year, a 35% increase from 2021.”

It is hard to find details of how much the Russia paid Ukraine in the first year of the war in 2022 or 2023. It will be a lot less than expected!

Russia LNG could flow via Bulgaria, then Turkey, then into the EU, I guess!

Onwards!!!

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