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    Ukraine Earns $2.1bn from Russian Gas Transit in 2020


Gazprom sent 4.2bn m3 less gas through Ukraine last year than it paid to transit.

by: Joe Murphy

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Ukraine Earns $2.1bn from Russian Gas Transit in 2020

Russia's Gazprom paid some $2.1bn for gas transit services via Ukraine in 2020, Ukrainian state gas company Naftogaz reported on January 14.

Under the ship-or-pay transit contract Gazprom reached with Ukraine in December 2019, the Russian supplier paid to transit 65bn m3 of gas through the country last year, even though it only sent 55.8bn m3, marking a 45% decline year on year and the lowest level in nearly three decades.

The minimum ship-or-pay threshold will fall to 40bn m3/year in 2021 through 2024, giving Gazprom greater flexibility. This will still earn Ukraine over $7.1bn in transit revenues over the four years though, Naftogaz said.

Earlier this week an explosion ripped through the Urengoy-Pomary-Uzhgorod pipeline which serves as one of the routes for Russian gas through Ukraine. But transit volumes were unaffected. This marked the second blast at a Ukrainian pipeline in less than four months.

Gazprom cut transit via the country by a third in early January to 130mn m3/day, Sergei Makogon, the CEO of Ukraine's transmission system operator GTSOU, said on social media on January 6, without specifying the reason for the reduction. Gazprom is delivering gas to Bulgaria and Serbia through TurkStream, which bypasses Ukraine from the south.