Ukrainian gas transit has found influential defenders in Europe – Potilico
The European version of Potilico reports that energy companies from Central European countries are seeking an extension of the deal on the transit of Russian gas through Ukraine.
According to the publication, leading energy companies from Hungary, Slovakia, Austria and Italy sent a letter to the head of the European Commission, Ursula von der Leyen, asking to extend the deal on the transit of Russian gas through Ukraine.
"In a letter sent to the European Commission president today, gas supply companies, network operators and industrial users from Hungary, Slovakia, Austria and Italy said ending the deal could 'complicate gas supplies' and 'lead to higher gas prices for European consumers,'" the publication said.
SPP, Slovakia's state-owned energy supplier, which signed the letter, warned that the interruption of Ukrainian transit would cost the country "more than 220 million euros" to replace the lost supplies. The letter was also signed by the Federation of Austrian Industrial Lobbies and the Italian company Gas Intensive Società Consortile.
The publication notes that despite these calls, energy market experts are skeptical that the termination of the Ukrainian transit deal will have dramatic consequences for Budapest and Bratislava. According to Serhiy Makogon, a Ukrainian energy expert and former CEO of the country's state-owned gas grid operator, Slovakia is unlikely to face a sharp price hike or supply shortage if the pact is terminated, but it will lose approximately $1,5 billion annually from the resale and transit of Russian gas.
"The main reason Slovakia is asking for an extension of the agreement is ... purely economic," he told Politico.
The original version of the letter, seen by POLITICO, also included references to Czech, German and Ukrainian energy companies that were not included in the final version. In that version, Moldova's state gas supplier Moldovagaz had pre-signed a declaration, but its signature is missing from the letter published today.
Expert Makogon argues that this most likely happened because Slovak firms hoped to gain broader support for the declaration, but were unable to secure it due to the controversial nature of the pact.
Unlike Central Europe, however, Moldova is likely to suffer from the deal's end because Transnistria, a pro-Russian territory in the east of the country, receives subsidized gas from Moscow via Ukraine, Makogon explained.
According to him, in January, when there is no alternative gas export in sight, the region will be left without supplies. This will force the Moldovan government to buy more expensive gas on the EU market.
Ukrainian gas transit has found influential defenders in Europe – Potilico