Ukraine and Russia intend to continue providing gas supplies to Europe, despite hostilities near a key cross-border gas transit point through the Suja gas intake station in Russia's Kursk region. This is reported by Bloomberg with reference to anonymous sources familiar with the situation.
Ukraine's incursion into Russian territory has sent gas prices soaring to their highest level this year amid fears of supply disruptions. However, both sides have strong financial incentives to continue transit. For Kyiv, gas transit is a critically important source of revenue for the war-torn economy. In 2021, Ukraine received about 1 billion dollars from gas transit.
For Russia, in turn, Europe is one of the largest consumers of its pipeline gas, and the stability of supply remains important to maintain market positions.
Ukraine has good reasons to protect its gas transport infrastructure. Having functioning pipelines is critical not only for economic reasons, but also to prevent possible military attacks on unused or damaged facilities. The costs of repairing such objects can be significant, which emphasizes the need to keep them in working order.
Currently, the Suja gas intake station, a key gas transit point, is under the control of Ukrainian troops. Russian supplier PJSC Gazprom said it continues to supply gas to this point, maintaining stable daily flows in the range of 37 to 40 million cubic meters. This is slightly less than the 42 million cubic meters per day that were supplied before the start of the operation in the Kursk region. The decrease in supply volumes reflects a decrease in demand from European consumers.
The Ministry of Energy of Ukraine declined to comment, but NJSC Naftogaz confirmed that it "intends to continue providing gas transportation services in accordance with the agreement." The agreement on gas transit between Ukraine and Russia, which expires in December, remains in force.
