Putin: There Will Definitely Be No More Contract for Gas Transit Through Ukraine

The contract for the transit of Russian gas through Ukraine will definitely not be extended, but Gazprom will cope it, President Vladimir Putin has said at a direct line combined with a press conference. The Russian president stressed that it was the Ukrainian side that refused to extend the contract, “although it received somewhere between $700-800 million a year from us,” rbc.ru reported. “This [transit] contract will no longer exist, everything is clear, but that means it’s good, we will survive, Gazprom will survive it,” Putin said. At the same time, Putin noted that Russia will increase its share of liquefied natural gas (LNG) on the global market. “This product will be in demand in global markets. We will continue to do so and will increase our share in the global LNG markets,” he said. The expiring contract for the transit of Russian gas through Ukraine was concluded at the end of 2019. At that time, Moscow and Kyiv signed a package of documents on the settlement of legal disputes and mutual claims between Gazprom and Naftogaz, as well as on a new transit contract for five years with an option to extend it for another ten years. Under the terms of the contract, Gazprom guaranteed a total of at least 225bn cubic meters of natural gas - 65bn cubic meters in 2020 and 40bn cubic meters each in 2021-2024. These volumes were subject to the ship-or-pay (pump or pay) rule, and Naftogaz reserved the relevant capacities from the company Gas TSO of Ukraine. The size of the transit tariff was not disclosed, but Ukrainian President Volodymyr Zelensky estimated the total revenue to be at least $7bn, i.e. about $31 per 1,000 cubic meters.