Europe will receive the last of Russian gas sent through Ukrainian pipelines in the early hours of the new year as the continent braces for a dip in temperatures that could hasten the drain on gas reserves.
The Russian state energy company, Gazprom, is expected to cut its exports Europe through Ukrainian pipelines on New Year’s Day after the gas transit between the countries was struck five years ago ended overnight.
In the absence of much of the 11th hour, you will note the historic change behind the Kremlin full scale riot the next in early 2022. Russia was once the continent’s largest supplier of gas but has lost almost all of its European customers since the war began, as have customers across central Europe. turned to the USNorway and Cathar were supplies.
“This is a moment of geopolitical significance,” said Tom Marzec-Manser, an independent gas market analyst. “The border crossing largely closes a major gas artery connecting Russia’s gas reserves to Europe and could mean that eastern European countries will import more of the gas traded in north-western Europe.”
Separation of pipeline flows between Russia and Ukraine as Kyiv faces increasing to act under pressure to end the war between military setbacks on the eastern front, where soldiers are fighting in freezing conditions, and growing fears that Donald Trump will withdraw US aid when he is inaugurated as president on January 20.
Ukraine may meet its gas demand after a break in weather conditions based on normal fossil fuel production and storage, but the International Energy Agency said a colder-than-average winter could increase Ukraine’s gas supply. import from EU
The cold snap after this week is already shaping up to be one of the most tested European gas markets in recent years, after a period in which reserves have been burned at the fastest rate since the energy crisis began.
European cities including London, Paris and Berlin can expect temperatures to dip below zero by the end of the week, well below normal for this time of year. A spell of freezing weather is expected to increase demand for heating gas and accelerate withdrawals from European reserves.
EU gas reserves have fallen by almost 20% since September, according to official data Gas Infrastructure Europe. That’s considerably more than in the last two winters, when the industry group reported single-digit drops over the same period, partly due to milder weather and weaker heavy industry demand.
The looming cold snap has caused European gas prices to climb nearly 5% since the start of the week to nearly €49 (£41) a megawatt hour, close to the annual high set in early December.
The market is expected to remain under pressure, with forecasts for a colder-than-usual January and lower winds to generate electricity, which could push back the use of gas for home heating and power plants.
“The last two winters have been very mild,” Marzec-Manser said. “So this is the first time since the recent gas networks in Europe were against the kind of conditions that the gas market could experience.”
The combination of cold, short daylight hours and weak wind speeds in November – known in the German language rest in darkness – It has already pushed Europe to use more winter gas supplies than normal at this time of year to heat homes and power grids are looking to replace wind power with electricity from gas generators.
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Russia will continue to supply countries including Hungary and Serbia through the TurkStream gas pipeline, which runs under the Black Sea. It will also export more gas via liquefied natural gas (LNG) tankers.
Kyiv has come under pressure from countries including Slovakia, which continues to buy Russian gas, to cut off talks for a new gas flow agreement with the Kremlin. But the president of Ukraine, Volodymyr Zelenskyy, stated that he did not agree to the deal because it would benefit Russia financially.
By ending the deal, Ukraine is expected to lose around $800m (£640m) a year in transit fees from Russia, but Gazprom will lose close to $5bn in European gas sales. The collapse of gas sales in Russia led Gazprom to an annual losses of $7bn in 2013″his first in more than 20 years.
Prime Minister Robert Fico said Slovakia could cut its back-up electricity supplies to Ukraine if Kyiv allowed the deal to expire. In response, Zelenskyy accused Fico of acting on behalf of the Kremlin by opening a “second industrial front” with Ukraine.