The Russia-Ukraine gas transit deal: opening a new chapter

On 30 December 2019, Gazprom and Naftogaz Ukrainy signed agreements covering the transit of Russian gas through Ukraine for the period 2020-24, with transit volumes of 65 bcm in 2020 and 40 bcm per year thereafter. In this Insight, we analyse how the deal was reached, the terms of the deal, and the likely transit flows via Ukraine during the period of the deal. We conclude that the deal will provide Gazprom with sufficient transit capacity in 2020, and from 2022 onwards, by which time we expect Nord Stream 2 and the Bulgarian & Serbian connections to Turk Stream to be operational. This leaves 2021 as a ‘bridge’ period, in which Gazprom may be obliged to book additional transit capacity via Ukraine.

By: Simon Pirani , Jack Sharples