Ukrainian gas transit agreement expired yesterday

HUNGARY - In Brief 01 Jan 2025 by Istvan Racz

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A Happy New Year to all Readers! The 5-year gas transit agreement between Ukraine and Russia expired yesterday, without any extension or replacement, because of Ukraine's reluctance to continue. In principle, this means that from now on, no Russian gas shipments will be transited towards Europe through the Brotherhood pipeline that runs through Ukraine. Previously, the annual amount transported to the EU through this route was 15 bcm (billion cubic meters), one-third of all Russian gas used by the EU, and 5% of total EU gas consumption. In recent days, the ever clearer prospect that the transit agreement would not be renewed has driven up the Dutch TTF gas price to €50.53/MWh, 54% higher than the starting price in 2024. By the way, the current TTF price is something like four times higher than the domestic price of natural gas in the US. With the Brotherhood pipeline now out of operation (in principle, once again, as for the time being we are unable to check if it is actually case), similar to the Yamal pipeline that runs through Belarus to Poland and Nord Stream 1&2, the latter of which were blown up after the start of the war in Ukraine, it seems reasonable to take a look at how Hungary's cross-border gas flows look. The following chart shows exactly that, in the form of a snapshot taken at 11:45 this morning (January 1). It shows the momentary flows through the various border crossing points (green lines meaning gas imports, yellow lines meaning gas exports). In addition, data is given on momentary domestic production, in-stocking or de-stocking, the level of gas inventories, and domestic consumption. For sure, this data changes from time to time, but overall, the c...