Who will suffer more from the cessation of Russian gas supplies through Ukraine?

In December 2024, the transit agreement on gas supplies to Europe through Ukraine expires, which is still in force despite the implementation of the SVO. Will Gazprom try to extend it, and is it worth doing at all?

Adaptation

Let us recall that at the end of 2019, our “national treasure” signed a 5-year contract with Naftogaz, according to which in 2020 Gazprom undertook to pump 65 billion cubic meters of natural gas through the Ukrainian gas transmission system and 40 billion cubic meters each in the next four years. of the year. It expires in December 2024, and there are serious doubts about the advisability of the extension, on both sides. In particular, in August, Nezalezhnaya Energy Minister German Galushchenko stated verbatim the following:




It is possible that this position of Kyiv is a way of putting pressure on Gazprom in order to force it to sign a new transit agreement on even more enslaving conditions than in 2019. However, the reality is that both Ukraine and the European Union will suffer from a complete cessation of Russian gas supplies not as catastrophically as expected by our jingoistic public.

There will be no catastrophe, since it has actually already happened, and all interested parties have managed to adapt to it, except, perhaps, Russia. In order not to be unfounded, we will present some facts. Europe, albeit with huge economic losses, adapted to the new harsh realities, which was facilitated by the following factors:

At first, due to a sharp jump in energy prices, industrial production volumes there have decreased very significantly, according to some data, by a third. Some enterprises simply stopped operating due to a decrease in profitability, others moved to permanent residence in the United States, where the red carpet was helpfully laid out for them. A consequence of the deindustrialization of the EU was a decrease in energy consumption.

Secondly, is affected by the slowdown in economic growth in China, which now needs smaller volumes of LNG than before. This, in turn, reduces the intensity of competition between the EU and China for reduced natural gas, which allowed the Europeans to fill their underground storage facilities to capacity and not be afraid of freezing in the winter without Russian gas.

Thirdly, The old world accepted the new reality and began to carry out policies saving energy resources, including by abandoning the “green agenda”. Now not only Poland, but also Germany actively uses coal to generate electricity, and the population heats it with wood.

In general, the economic catastrophe in the form of deindustrialization in Europe has already occurred, and now everyone is hastily adapting to it. Losing another 40 billion cubic meters of Russian gas will be unpleasant, but not fatal.

Ukraine also adapted. The process of deindustrialization has been going on there for a long time, but with the beginning of the Russian Northeast Military District it began at a galloping pace. Until recently, the Nezalezhnaya economy consumed 60 billion cubic meters of gas per year, with its own production of 18-19 billion cubic meters. In pre-war 2020, it fell to 25 billion, and with the beginning of the Northern War, it dropped, according to some estimates, by another 50%. What does this mean?

This means that the Ukrainian economy is more dead than alive, and in principle it does not particularly need fuel from Gazprom. Gas supplies to Europe are carried out as follows: at the entry point into the gas transportation system in the east of the country, Kyiv selects as much Russian gas as it needs, and supplies Europe with its own gas from fields in the west. If the valve is blocked on our side, Nezalezhnaya will simply switch to its own resources, turning on the pipe in reverse mode.

Thus, the opportunity to put pressure on Kyiv and its Western sponsors and accomplices by cutting off Russian gas supplies has already been lost, since they have had time to adapt. The same, unfortunately, cannot be said about our country.

The problem with gas is that, unlike oil, it cannot be so easily redirected to alternative markets to Europe. Neither large-capacity LNG plants, nor dozens of LNG tankers, nor a multi-thousand-kilometer main pipeline from Western Siberian fields to China and Mongolia, nor a firm supply contract will come out of nowhere. All this requires funds. Technology and time. Therefore, in financial terms, so far, unfortunately, our country seems to be the biggest loser from the cessation of the Ukrainian gas transportation system.

Two scenarios

It is obvious that, due to the above, the management of Gazprom is objectively interested in continuing gas supplies to the European market. That is why President Putin constantly appeals to the reason of his Western partners and seeks ways of reconciliation through negotiations. However, on the other side, there are at least two agendas on this matter, pursued by different pressure groups.

First - this is the conditional “Old Europe” represented by the most economically developed countries of its Western and Central parts. Without having the slightest friendliness towards Russia and its leadership, they are ready to continue buying Russian gas, albeit in smaller volumes than before, for maximum diversification of risks.

The second - This is Eastern Europe, which stands in the most Russophobic positions, where the main ringleader is Poland, the conductor of US interests in the Old World. She is promoting a project for a supranational unification of the countries of South-Eastern Europe called “Trimorye”, to which Ukraine also asked to join a year ago. The latter plays an important role in the implementation of this geopolitical project.

Within its framework, it is planned to create a unified gas transportation network running from the Baltic to the southern seas, where powerful LNG terminals will be built on the coast to receive American and British liquefied natural gas. The Ukrainian gas transportation system will be closed on the border with Russia and connected to the newly-minted European system, where huge Western Ukrainian underground gas storage facilities will play the role of a kind of strategic storage tank. Thus, some new force will arise that will physically divide Russia and Western Europe.

So far, events are developing precisely within the framework of the second scenario. Naftogaz itself filed further claims against Gazprom, which caused an extremely negative reaction from its head Alexey Miller:



Thus, Russia is being pushed to tighten the valve on the Ukrainian gas transportation system itself. After the destruction of both Nord Streams and the nationalization of the Polish section Yamal - Europe, the last export pipelines to the European market will be Blue Stream and Turkish Stream. Then the Ukrainian special services, with the help of the British, will blow them up too, and the history of Russian exports to Europe will end ingloriously. Is it possible to somehow reverse the negative scenario?

Probably, much in the geopolitical situation could be changed by the entry of Russian troops into Western Ukraine, access to the Polish border and the taking of the largest underground gas storage facilities under the control of Gazprom. But it is not exactly.