Gazprom Halts Ukrainian Transit to Romania

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Russia’s Gazprom on Apr. 1 stopped piping natural gas to Romania via Ukraine, data from the Ukrainian gas transmission system operator, GTSOU, show. The halt follows the recent termination of Gazprom’s legacy transit contract for the Romanian section of the trans-Balkan pipeline, which now allows Romania to use the pipeline in reverse mode and provide third-party access to capacity (NC Mar.11'21). As a result, Gazprom now supplies Romania from the south, via the Turk Stream offshore pipeline landing in Turkey and its onshore links in Bulgaria. The trans-Balkan pipeline used to ship Russian gas from Ukraine to Moldova, Romania, Bulgaria and Turkey, as well as neighboring markets in the Balkans via interconnections, but now only Moldova continues to receive Russian gas via the route. Turkey and Bulgaria, as well as neighboring Greece and North Macedonia, started receiving gas from Turk Stream after the 31.5 Bcm/yr pipeline’s launch in early 2020. This year, Turk Stream gas started to flow also into Serbia via the new onshore link through Bulgaria, dubbed Balkan Stream. In October this year, Serbia should start to transit Turk Stream gas further to Hungary, which might cost Ukraine another 10 Bcm-12 Bcm/yr in Russian gas transit, GTSOU Director Sergiy Makogon wrote on Facebook this week. Due to the redirection of flows to Turk Stream, still much underutilized, and the overall drop in Gazprom’s exports, Ukraine transited 55.8 Bcm of Russian gas last year, down 38% from 2019 and below the 65 Bcm level booked and prepaid by Gazprom under the five-year transit deal signed in 2020. For this year, Gazprom booked 40 Bcm in annual transit capacity. It remains reluctant to book any significant extra capacity despite the strong growth in exports and further delays in construction of the 55 Bcm/yr Nord Stream 2 pipeline, which like Turk Stream threatens Ukraine’s transit role. Makogon said it is important to prevent Nord Stream 2 from being completed, because the Ukrainian transit is not only a source of revenue but also a key element of Ukraine’s energy and military security.

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