Valletta, Jan 2
The halt in Russian gas transit through Ukraine has sparked fears of supply shortages and soaring energy costs, particularly in landlocked European nations like Slovakia.
Both Ukraine and Russia announced the stoppage on Wednesday, pushing some EU countries to resort to costlier energy alternatives, Xinhua news agency reported.
Slovak Prime Minister Robert Fico on Wednesday said that stopping gas transit through Ukraine to Europe will have "severe consequences for all of us in the European Union (EU), but will not harm Russia."
The stoppage follows Ukraine's decision not to renew a 2019 gas transit agreement between its state-run Naftogaz and Russia's Gazprom, which expired on December 31, 2024.
"At 07:00 a.m. (0500 GMT), in the interests of national security, the transportation of Russian natural gas through the territory of Ukraine was stopped," the Ukrainian Energy Ministry said in a statement on Wednesday. Similarly, Gazprom confirmed that it has stopped gas supply due to expiration of key agreements and Ukraine's refusal to renew them.
In a letter to the European Commission (EC) on Sunday, Fico condemned Ukraine's gas transit halt as irrational and warned it would heighten tensions and harm the EU more than Russia. He also indicated his government might consider measures such as cutting electricity supplies to Ukraine.
Slovakia, heavily dependent on Russian gas, is among the worst-hit countries. It imported approximately 3 billion cubic metres of natual gas from Russia through Ukraine annually, accounting for two-thirds of its demand.
However, the EC has downplayed the potential impact, with a spokesperson saying that the European gas infrastructure is "flexible enough" to provide gas of non-Russian origin to central and eastern Europe via alternative routes, and that it has been reinforced with significant new liquefied natural gas (LNG) import capacities since 2022.
Mark Cigoj, editor-in-chief of the Croatian weekly 7 Dnevno, has said that Slovakia, Austria, and Hungary are particularly vulnerable, given their reliance on Russian gas and lack of direct access to LNG imports.
Slovakia's Regulatory Authority for Network Industries, the country's energy regulator, has forecasted household gas price increases of 15-34 per cent in 2025 without state energy assistance.
To cushion the impact, the Slovak government has allocated around 235 million euros ($244 million) for energy aid, further straining the country's already tight budget.
SPP, Slovakia's state-owned gas utility, on Wednesday assured continued supply but acknowledged the increased costs of alternatives.
Moldova, which imports approximately 2 billion cubic metres of gas annually from Russia via Ukraine, has enacted measures on Wednesday to cut electricity usage by at least 30 per cent.
The measures include limiting street lighting, stopping escalators in some public and commercial buildings, and changing the working hours for high-energy-consuming areas.
In 2023, roughly 15 billion cubic metres of Russian gas were transported via Ukraine to Europe, accounting for around 5 per cent of Europe's needs. Following the halt of Ukraine transit, the TurkStream pipeline under the Black Sea becomes the sole remaining route for transporting Russian gas to Europe.
According to the EC, the share of Russia's pipeline gas in EU imports has plummeted from over 40 per cent in 2021 to about 8 per cent in 2023.
However, Cigoj noted that the EU must develop a clear plan for coordinating gas purchases among member states, warning that higher margins and transport costs will drive up gas prices, further fueling inflation.
While many European countries have significantly reduced their reliance on Russian gas since the outbreak of the Russia-Ukraine conflict, nations like Slovakia, Hungary, and Austria remain dependent on it.
Slovak Vice Premier and Economy Minister Denisa Sakova said on Tuesday that Slovakia is technically well-prepared for the stoppage of gas supplies, as the country has sufficient gas reserves and alternative gas supplies for the year of 2025.
However, she warned of challenges if the issue persists into the winter heating season next year.
Obviously, European countries will have to organise themselves to purchase significantly more expensive gas from other sources in the future, Cigoj said.
Markus Krug, deputy head of the gas department at Austria's energy regulator E-Control, has said that Russian gas would likely continue to flow through Turkey, supplying Hungary. He estimated that Slovakia's gas supply could primarily come from Hungary, the remainder from Austria, the Czech Republic and Poland.
The TurkStream gas pipeline, with an annual capacity of 31.5 billion cubic metres, offers limited capacity to absorb increased demand. To address the shortfall, the EU will have to rely more heavily on LNG imports, which come at a significantly higher cost.