Russian gas flows via Ukraine totaled 1.31 Bcm in May: AGPU

Russian gas deliveries to Europe via Ukraine totaled 1.31 Bcm in May, up by 5% year on year but still only 39% of the contracted volume, Ukrainian gas industry group AGPU said June 11.

Despite the ongoing war, Russia's Gazprom has continued to send gas to Europe via Ukraine, with volumes delivered at the Sudzha interconnection point on the Russia-Ukraine border at a rate of some 42 million cu m/d.

However, transit volumes have been well below contracted levels.

"In May, Gazprom pumped 1.31 Bcm, or 39% of the contracted volume. This is 5% more than last year, but 36% less than in 2022 and 66% less than in 2021," AGPU said.

Ukraine's Naftogaz, grid operator GTSOU and Gazprom signed a five-year gas transit agreement in December 2019 that is due to expire at the end of this year.

Ukrainian officials have repeatedly said Kyiv would not be party to talks with Moscow on any contract extension and EU energy commissioner Kadri Simson has ruled out playing any role in facilitating any prolongation.

Total Russian gas transit volumes amounted to 14.65 Bcm in 2023.

The agreement was signed under ship-or-pay terms, meaning Gazprom is obliged to pay for transit whether it uses it or not.

Gazprom is contracted to send 110 million cu m/d of Russian gas to Europe via Ukraine in 2024 -- or a total of 40 Bcm -- before the contract expires.

But since May 2022 Gazprom has been flowing less gas than agreed in the contract and paying less than the agreement provides.

Remaining flow

A number of EU countries continue to import Russian gas via Ukraine, with Austria, Slovakia, the Czech Republic and Italy chief among them.

Simson said May 30 following a meeting of EU energy ministers in Brussels that she had been working on diversification options for member states likely to affected by the end of transit.

"The last remaining 14 Bcm that European companies are still receiving via the Ukrainian route do need replacement in such a way that it doesn't impact security of supply in some member states," she said.

Simson said that all companies involved knew that the transit contract would expire at the end of 2024. "This is a known fact for everybody," she said.

"There are existing alternative corridors that could provide gas to landlocked countries that are still buyers of Russian gas."

Simson also said Europe could satisfy its demand for next winter and can refill its gas storage in spring 2025 without using Russian pipeline gas.

It comes as European gas prices trade back well above Eur30/MWh. Platts, part of S&P Global Commodity Insights, assessed the benchmark Dutch TTF month-ahead price at Eur34.54/MWh on June 10.

Exchange sales

Separately, AGPU said some 99 million cu m of gas was sold in May on the Ukraine Energy Exchange at a weighted average price of Hryvnia 12,346/1,000 cu m ($304/1,000 cu m).

The most active bidders during the month were UkrNafta and grid operator GTSOU.

AGPU said that since the beginning of 2023 market participants had sold 1.841 Bcm of gas on the exchange.

Private producers and traders began selling gas on the Ukrainian Energy Exchange in April 2023 after a fall in consumption and purchases by the industrial sector in the country.

Artem Petrenko, executive director of AGPU, told S&P Global in an interview in July last year that the sales had been crucial for gas-producing companies as they were able to sell gas in a transparent, market-based way.