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Russian gas era in Europe ends after Kyiv stops transit; Zelensky optimistic US will still back efforts to stop Russia

Russian gas era in Europe ends after Kyiv stops transit; Zelensky optimistic US will still back efforts to stop Russia
Reuters
By Reuters
1 Jan 2025
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The last remaining EU buyers of Russian gas via Ukraine, such as Slovakia and Austria, have arranged an alternative supply, while Hungary will keep receiving Russian gas through the TurkStream pipeline under the Black Sea. The stoppage – which follows Zelensky’s refusal to extend his country’s transit agreement with Gazprom – is expected to cost Kyiv $1-billion a year in transit fees from Russia. Putin, meanwhile, has ordered his government to cooperate with China on developing AI.

Russian dominance over Europe’s energy markets ends


Russian gas exports via Soviet-era pipelines running through Ukraine came to a halt on New Year’s Day, marking the end of decades of Moscow’s dominance over Europe’s energy markets.

The gas had kept flowing during three years of war, but Russia’s gas firm Gazprom said it had stopped at 5am GMT after Ukraine refused to renew a transit agreement.

The widely expected stoppage will not affect prices for consumers in the European Union – unlike in 2022, when falling supplies from Russia sent prices to record highs, worsened a cost-of-living crisis and hit the bloc’s competitiveness.

The last remaining EU buyers of Russian gas via Ukraine, such as Slovakia and Austria, have arranged an alternative supply, while Hungary will keep receiving Russian gas through the TurkStream pipeline under the Black Sea.

But Transdniestria, a breakaway pro-Russian region of Ukraine’s neighbour Moldova also reliant on the transit flows, cut off heating and hot water supplies to households early on Wednesday. Local energy company Tirasteploenergo urged residents to dress warmly, hang blankets or thick curtains over windows and balcony doors and use electric heaters.

Ukrainian President Volodymyr Zelensky, writing on the Telegram messaging app, said the end of gas transit through his country to Europe was “one of Moscow’s biggest defeats” and urged the US to supply more gas to Europe.

“The more there is on the market from Europe’s real partners, the faster we will overcome the last negative consequences of European energy dependence on Russia,” he wrote.

Europe's “joint task” now, he wrote, was to support ex-Soviet Moldova “in this period of energy transformation”.

The European Commission said the EU had prepared for the cut-off.

“The European gas infrastructure is flexible enough to provide gas of non-Russian origin,” a spokesperson said. “It has been reinforced with significant new LNG (liquefied natural gas) import capacities since 2022.”

Russia and the former Soviet Union spent half a century building up a major share of the European gas market, which at its peak stood at around 35%. But the EU has slashed its dependence on Russian energy since the start of the war in Ukraine by buying more piped gas from Norway and LNG from Qatar and the US.

Ukraine, which refused to extend the transit deal, said Europe had already made the decision to abandon Russian gas.

“We stopped the transit of Russian gas. This is a historic event. Russia is losing its markets, it will suffer financial losses,” Ukraine’s energy minister, German Galushchenko, said.

Ukraine will lose up to $1-billion a year in transit fees from Russia. To help offset the impact, it will quadruple gas transmission tariffs for domestic consumers from Wednesday, which could cost the country’s industry more than 1.6-billion hryvnias ($38.2-million) a year.

Gazprom will lose close to $5-billion in gas sales.

The company halted supply to Austria in mid-November over a contractual dispute, but in recent weeks Russian gas has been reaching Austria via Slovakia at a rate of around 200 gigawatt hours (GWh) a day. From Wednesday, only about 7GWh per day is expected to flow from Slovakia to Austria, Austrian energy regulator E-Control said.

Slovakia’s main gas buyer SPP said it would supply its customers mainly via pipelines from Germany and also Hungary, but would face additional transit costs.

Combined pipeline routes from Russia delivered a record high 201 billion cubic metres (bcm) of gas to Europe in 2018.

The Nord Stream route across the Baltic Sea to Germany was blown up in 2022, and the Yamal-Europe pipeline through Belarus has also shut down.

Russia shipped about 15bcm of gas through Ukraine in 2023, down from 65bcm when the last five-year contract began in 2020.

Zelensky optimistic US will continue to back Ukraine’s efforts to stop Russia 


President Volodymyr Zelensky said late on Tuesday, 31 December 2024, that no one would give peace to his country as a gift, but he believed the US would stand alongside Kyiv as it fights to stop Russia’s 34-month invasion.

In a slick 21-minute New Year video greeting to his compatriots, Zelensky also said only a strong Ukraine could secure peace and earn worldwide respect.

“We know that peace will not be given to us as a gift, but we will do everything to stop Russia and end the war, something each of us desires,” Zelensky said, with the blue-and-yellow national flag, battlefield scenes and pictures of children in the background.

He recalled conversations with outgoing US President Joe Biden, President-elect Donald Trump and “everyone who supports us in the United States”.

“I have no doubt that the new American president wants and will be able to bring peace and end [Russian President Vladimir] Putin’s aggression,” Zelensky said.

“He understands that the former is impossible without the latter. Because this is not a street brawl where the two sides need to be pacified. This is a full-scale aggression by a deranged state against a civilised one. And I believe that, together with the United States, we are capable of the strength to force Russia into a just peace.”

He said Russia was not to be trusted either in battle or in talks.

“If today Russia shakes your hand, it doesn’t mean that tomorrow the same hand will not start killing you,” he said. “Russians fear those who are free. What they don’t understand. They fear freedom.”

Biden’s administration has provided by far the most military support for Ukraine among Western nations since the February 2022 full-scale invasion.

Ukraine has been wary of Trump’s criticism of aid to Kyiv and his pledge, during the US election campaign, to bring a quick end to the war, but Zelensky expressed optimism about ensuring continuing US support.

Ukraine has endured a difficult year, with Russian forces taking village after village in a quicker advance on the eastern front than since the beginning of the invasion.

In recent months, Zelensky has said that any settlement to the conflict is predicated on receiving security guarantees from Western nations and Kyiv’s securing an invitation to join the Nato alliance, a notion Russia rejects out of hand.

In his greeting, Zelensky said that in the past year, Ukraine had launched an incursion into southern Russia’s Kursk region, staged long-range drone strikes against distant Russian targets and developed domestically produced drones and other weapons.

“Every day in the coming year, I and all of us must fight so that Ukraine can be strong enough,” he said. “Only such a Ukraine is respected and heard – both on the battlefield and at the negotiating table.”

Putin orders government and top bank to develop AI cooperation with China


President Vladimir Putin has ordered Russia’s government and the country’s biggest bank, Sberbank, to build cooperation with China in artificial intelligence (AI).

Putin’s instructions were published on the Kremlin’s website on Wednesday, three weeks after he announced that Russia would team up with BRICS partners and other countries to develop AI.

He told the government and Sberbank, which is spearheading Russia’s AI efforts, to “ensure further co-operation with the People’s Republic of China in technological research and development in the field of artificial intelligence”.

Western sanctions intended to restrict Moscow’s access to the technologies it needs to sustain its war against Ukraine have resulted in the world’s major producers of microchips halting exports to Russia, severely limiting its AI ambitions.

Sberbank CEO German Gref acknowledged in 2023 that graphics processing units, the microchips that underpin AI development, were the trickiest hardware for Russia to replace.

By partnering with non-Western countries, Russia is seeking to challenge the dominance of the US in one of the most promising and crucial technologies of the 21st century.

Putin said on 11 December 2024 that a new AI Alliance Network would bring together specialists from BRICS countries and other interested states.

Russia currently ranks 31st of 83 countries by AI implementation, innovation and investment on UK-based Tortoise Media’s Global AI Index, well behind not only the US and China but also fellow BRICS members India and Brazil.

Two killed in Russian drone strike on Kyiv


Russia launched a New Year’s Day drone strike on Kyiv early on Wednesday, killing two people, wounding at least six others and damaging buildings in two districts, authorities said.

Explosions boomed across the morning sky as Ukraine’s air force warned of incoming drones and Mayor Vitali Klitschko said air defences were repelling an enemy attack.

Two floors of a residential building in central Kyiv were partially destroyed in the strike, according to the State Emergency Service. Two people were killed, it said.

Photos posted by the agency showed firefighters dousing a gutted corner of a building and rescuers helping elderly victims.

The National Bank of Ukraine said that one of its buildings nearby had been damaged by debris from a downed drone. Debris also damaged a non-residential building in a different neighbourhood, authorities said.

“Even on New Year’s Eve, Russia was only concerned about how to hurt Ukraine,” President Volodymyr Zelensky said on social media in response to the strike.

Kyiv’s military said it had shot down 63 out of 111 drones launched by Russia overnight across various regions of Ukraine. Another 46 had been downed by electronic jamming, it added.

Russia has carried out regular air strikes on Ukrainian towns and cities far behind the front line of its nearly three-year-old invasion.

On Tuesday, Moscow’s forces fired 21 missiles at Kyiv and the northern Sumy region during an overnight strike, damaging buildings and infrastructure in the city of Shostka.

In a separate attack on Wednesday, a 23-year-old volunteer worker was killed by Russian shelling in the southern frontline city of Kherson, city officials said. DM

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