Ukraine said it will neither prolong a five-year deal with Russia’s state-owned gas company Gazprom to transport Russian gas through and to Europe, nor sign another deal.

Since Moscow’s full-scale invasion of Ukraine in 2022, Europe has attempted to replace Russian gas with energy sources from elsewhere in an attempt to dry up the flow of revenue to the country. However, despite usage falling, the EU still imported 40–45 billion cubic metres (bcm) of Russian gas in 2023.

Under the current agreement signed by Moscow and Kiev in 2019, Russia pays Ukraine to export gas to Europe via its pipeline network. The deal is set to expire by the end of 2024.

Ukraine’s energy minister, German Galushchenko, said: “I can confirm that we have no plans to enter into any additional agreements or extend this (current) agreement.”

In a statement seen by Reuters, he said that a stress test of Ukraine’s gas transmission system and underground gas storage facilities proved that its gas system “can function without transit”. The stress test was carried out to ensure that Ukrainian consumers will still receive gas supplies without the flow from Russia to Europe.

In January, Kremlin spokesman Dmitry Peskov said that Russia will use alternative routes and liquefied natural gas supplies should the deal not be extended.

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The cessation of the deal will have significant implications for Gazprom, with Europe being its biggest market. Speaking to the Financial Times, Marcel Salikhov, head of Russian think tank the Institute for Energy and Finance, said: “Gazprom understands that it will never again have as big and fat a slice of the pie as Europe, and it simply has to accept that. The only way forward now is to look for relatively smaller sources of revenue and gradually develop them, gathering crumbs.”