Russia's Putin says 'impossible' to conclude gas transit deal by year-end

Russian President Vladimir Putin said Dec. 26 that it would be "impossible" to agree any Ukrainian gas transit deal before the end of the year.

The current five-year Russia-Ukraine gas transit deal expires at the end of 2024 and Russian gas flows to Europe via Ukraine will cease if no new arrangements are put in place.

"There is no contract -- and it is impossible to conclude it in 3-4 days, no way," Putin was quoted as saying by Russian news agency Tass.

However, Putin said a future option to conclude contracts for gas delivery through third parties was possible, giving as examples possible intermediaries from Turkey, Hungary, Slovakia or Azerbaijan.

"The problem is that Gazprom has long-term contracts, until 2035, until 2049, and in order to change the situation with transit, these contracts need to be dissected," he said. "This is a complex procedure."

Some 42 million cu m/d of Russian gas still flows to Europe via the Sudzha interconnection point on the border with Ukraine, with gas finding homes in Moldova, Slovakia, Austria and Italy.

Gazprom's long-term contracts include specific delivery points and delivery arrangements that would likely need to be amended if gas is supplied under different terms.

Concerns over the loss of Russian gas supplies to Europe via Ukraine have lent support to European gas prices in recent months.

Platts, part of S&P Global Commodity Insights, last assessed the benchmark Dutch TTF month-ahead price on Dec. 24 at Eur45.54/MWh.

Ukraine stance

Putin has previously blamed Ukraine for refusing to agree to any new deal.

Speaking Dec. 19, Putin said that it was Ukraine that had refused to extend the contract and Ukraine that was cutting off Russian gas supplies to European consumers.

He added that this would create problems for European consumers who are used to relatively cheap Russian gas.

Ukraine has repeatedly ruled out talks with Moscow on continued Russian gas transit.

Ukrainian President Volodymyr Zelensky, speaking from Brussels Dec. 19, reiterated that Ukraine would not facilitate transit of any gas via its territory if it benefitted Russia financially.

It came after Slovakian gas importer SPP -- together with other entities including Hungarian importer MVM, Slovakia's grid operator Eustream and gas consumer groups from Austria and Italy -- made a renewed push for continued Russian transit via Ukraine on Dec. 17.

The parties signed a declaration to support the preservation of gas transit through Ukraine, with SPP saying it considers it the "most advantageous solution" for its customers.

It was followed by a surprise visit by Slovakia's Prime Minister Robert Fico to Moscow on Dec. 22.

There have also been suggestions that Azerbaijan could help facilitate continued transit of gas via Ukraine.

However, Zelensky on Dec. 19 rejected the idea of any kind of swap arrangement that would see Russia continue to earn money from gas sales in order to finance its war against Ukraine.

"We will not give Russia the possibility of additional earnings," he said.

The European Commission also said Dec. 17 that it had "no interest" in the continuation of Russian gas transit via Ukraine.

Slovakia remains largely dependent on Russian gas imports via Ukraine and SPP CEO Vojtech Ferencz said Dec. 17 that alternatives to Russian gas would be "significantly" more expensive.