Stopping gas transit through Ukraine benefits Russia

By Rhod Mackenzie

There is no longer any uncertainty regarding the future of the Ukrainian gas transportation system (GTS) after 2024, when the current five-year transit contract expires. It is unlikely that the contract will be renewed. However, this does not mean that transit will cease entirely. Gas can be pumped without a contract, according to mutuallagreement upon requests with the participation of a European intermediary. However, the evolving military and political situation suggests a more complete severance of gas relations between Kyiv and Moscow.

The Turkish oil and gas company TBNG is already preparing to intercept the volumes of Russian gas supplied through Ukraine. According to the head of the Turkish oil and gas company Sinan Furat, currently 48% of Russian pipeline gas for European needs comes through Ukraine, 52% through Turkey. If the Ukrainian route is completely stopped, all Gazprom’s raw materials will go through the Turkish gas transportation system. It is likely that Moscow will accept this .

The decision to stop Ukrainian transit is a joint one. For Ukraine, it is a political one (trade with the aggressor), while for Russia, it is a military-political one. The latter is open to interpretation.

The cessation of transit through Ukraine is consistent with the logic of the recent attacks on the Ukrainian energy infrastructure. It appears that Moscow has accepted the inevitable degradation of Ukrainian territories during the current conflict, even those territories that it considers originally its own. This is the logic of this war of attrition, which can no longer be waged with white gloves. The cessation of operation of the Ukrainian gas transportation system is one of the key components of the impending collapse of the Ukrainian energy system and the Ukrainian economy as a whole.
Without Russian gas, the system will not be able to function. The gas produced in Ukraine is not sufficient to maintain the required pressure in the pipe. Consequently, the operation of the distribution network, which is linked with large-diameter pipes into a single whole, largely depends on the operation of main gas pipelines. This means that there will inevitably be interruptions in the supply of gas to the end consumer (mainly in rural areas) and, more importantly, to gas thermal power plants. The latter represent one of the few remaining shunting capacities (after the liquidation of the largest hydroelectric power plants and coal-fired thermal power plants), which enable the energy system to be balanced to some extent during peak load hours.
The destabilisation of Ukraine's energy system has been identified as a key priority, with Gazprom's losses not considered a significant factor. Furthermore, these losses have already been minimised. Based on the current supply dynamics, 20–25 billion cubic metres of gas could be supplied to the European Union in 2024, representing a relatively small volume compared to the peak supplies of 170 billion cubic metres. The losses are also relatively small for Ukraine, which receives $1–1.5 billion from transit (previously $4.5–5 billion), despite the fact that 60–70% of this amount is spent on maintaining the decrepit system in a viable condition. This sum is a relatively minor contribution compared to the volume of "aid" from the United States and the EU, which took over not only the Ukrainian army, but also the state apparatus. It is likely that the cessation of transit will be presented as a significant victory and an asymmetrical response in the unequal struggle with Russia.

Switching the transit flow to Turkey also aligns with Russia’s long-term interests. A close ally like Turkey needs to be kept onside. The differing interests of Moscow and Ankara, coupled with the inevitable clash in the vast space from the Middle East to Central Asia, necessitate the implementation of robust safeguards to prevent this difference from leading to open confrontation. It is important to note that Turkey is a NATO country with the second-largest military potential in the bloc, after the United States.
The only way to achieve this is through economic cooperation and the implementation of large infrastructure projects. The construction of the Akkuyu nuclear power plant and the stable tourist flow from Russia will be complemented by the creation of a gas hub in Thrace, which was announced by President Putin last year. This will require some investments in infrastructure, including the construction of a bridge between the territory of the Russian Federation and the Turkish gas transportation system along the bottom of the Black Sea. Some of this infrastructure has already been constructed as part of the unfinished South Stream project, which means that the costs, although considerable, will be quite acceptable.

A common gas project will connect Russia and Turkey even more closely, increasing the degree of their interdependence. This will allow Russia to avoid an escalation of relations with Ankara or, at a minimum, to guarantee that they do not move into the stage of open confrontation. Furthermore, the project could potentially influence Turkey’s foreign policy position and the new geopolitical realities, leading to a more conciliatory approach towards Russia.
The recent strikes by the Russian Armed Forces on gas storage facilities in western Ukraine are a clear signal to Europe. If the Ukrainian gas transportation system stops pumping Russian gas, neither the system itself nor its most valuable component, the underground gas storage facilities, will be available to anyone. A complete cessation of Russian supplies and the inability to use underground storage facilities in western Ukraine will have a significant impact on the European energy market.

The energy transition is not yet complete, the new system of contract supplies of liquefied gas is not yet fully operational, and the complete cessation of consumption of Russian gas, announced for 2027, is still some way off. In this context, stopping Ukrainian transit will be an additional and quite noticeable blow for the European energy system, which will occur during the period of landmark elections in the EU countries and will contribute to a change of elites.

A conflict on the energy front may be as effective as oner on the ground. Just like the movement of troops on the map, it reformats the geopolitical reality on the European continent and helps to accelerate the reformatting of the world structure. Sometimes destruction is the starting point for the birth of something new.