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Kiev to do great harm to EU if it fails to extend gas transit agreement with Moscow — MFA

Mikhail Galuzin emphasized that, "no notifications from the Ukrainian side about such intentions have been received through official channels"

MOSCOW, June 2. /TASS/. Ukraine will cause great damage to the EU and "shoot itself in the foot" if it fails to extend the gas transit agreement with Russia after 2024, Deputy Foreign Minister Mikhail Galuzin told TASS on Friday.

Former CEO of Austrian oil and gas company OMV Gerhard Roiss said earlier that Ukraine does not intend to renew the gas transit agreement with Russia, which expires at the end of 2024.

"If the transit agreement is not extended after 2024, Ukraine will strike at the EU countries that buy Russian gas, and at the same time shoot itself in the foot, losing dividends from transit. This situation will negatively affect Europe’s energy independence, but will undoubtedly evoke joy in Washington, which is seeking to make it [Europe] economically and politically dependent and to profit as much as possible from the Ukrainian crisis," Galuzin said.

The deputy minister emphasized that, "no notifications from the Ukrainian side about such intentions have been received through official channels." However, according to him, Moscow will not be surprised if Kiev decides to abandon the agreement on gas transit.

"As you know, the Kiev regime views absolutely all areas of its foreign and domestic political and economic activities exclusively through an anti-Russian lens. It is ready to take any steps to harm Russia, even if [its own interests and those of] other countries suffer from it," he said.

He highlighted the fact that Gazprom’s natural gas supplies to European countries currently traverse Ukraine in accordance with an agreement with Ukraine’s Naftogaz dated December 30, 2019, which provides for the use of the Ukrainian gas transportation system for Russian gas transit through the end of 2024. Galuzin pointed out that this document was signed on the basis of EU legal norms and establishes guaranteed pumping volumes with the option of increasing them.

"Gazprom pays Naftogaz a lot of money for the transit of gas. It is known from open sources that the tariff is $32 per 1,000 cubic meters. According to the agreement, 65 billion cubic meters were pumped in the first year, and in the subsequent four years, 40 billion cubic meters (i.e. 109.6 million per day) should be transported. In other words, Russia pays Ukraine about $1.3 billion a year for gas transit. The Russian side is in full compliance with the terms of transit," the deputy foreign minister added.

As the diplomat noted, in May 2022, "when the territory of the Lugansk People’s Republic (LPR), where the gas measuring station is located, was liberated during the special military operation, Kiev refused to use it" and thereby stopped the transportation of gas through one of the two transit routes passing through Ukraine. As a result, pumping volumes have decreased "and now amount to about 46 million cubic meters per day instead of 109.6 million." "Let me remind you that Ukraine itself does not formally buy Russian gas. In November 2015, it unilaterally stopped its direct purchases from Russia. De jure, it buys it on a reverse basis from EU countries, mainly Slovakia, Hungary and Poland. But, injection into storage facilities is de facto carried out from the gas transportation system within Ukraine," Galuzin concluded.

About the gas transit agreement

On Wednesday, Gerhard Reuss, former CEO of Austrian oil and gas company OMV, citing a conversation with Ukraine’s deputy minister of energy, said that Kiev would not renew the gas transit agreement with Russia after 2024. According to him, Ukraine intends to implement the agreement through 2024, but will not renew it.

In December 2019, Moscow and Kiev agreed to extend the transit of Russian gas through Ukrainian territory for the period from 2020 through 2024, with the possibility of renewing the agreement for another 10 years. The contract provides for the transit of 65 billion cubic meters of gas in 2020 and 40 billion cubic meters annually from 2021 through 2024. The transit arrangement works on the "pump or pay" principle, wherein transit fees are charged for the amount of booked capacity, even if volumes actually pumped are less.