Assuming that Ukrainian gas transit does not resume – despite Slovakia lobbying aggressively for this, with its Prime Minister Robert Fico threatening to cut electricity supplies and withhold aid to Ukraine if it does not allow continued flow – this leaves TurkStream.

WHAT: TurkStream is now the only export route for Russian gas to Europe.

WHY: Transit through Ukraine ended on January 1 after the expiry of the contract between Moscow and Kyiv.

WHAT NEXT: High gas prices will restrain gas demand in Europe, which will resort to extra LNG to replace Russian gas.

 

The TurkStream pipeline is now the only export route for Russian natural gas to Europe, following the expiry of the contract between Moscow and Kyiv covering transit through Ukraine at the start of this year.

Assuming flow via Ukraine is not resumed, Russia stands to lose billions of dollars of revenue from gas sales this year, and reliance on a single route poses an energy security risk for remaining European buyers of Russian gas, and a risk of Gazprom losing further revenues, should Russian fears of a successful sabotage attack by Ukraine come to materialise, or some other disruption occur. Indeed, Russia’s defence ministry claimed on January 13 that nine Ukrainian drones were shot down attempting to take out a TurkStream compressor station in the Krasnodar region of southern Russia. 

TurkStream, consisting of two strings under the Black Sea from Russia to Turkey, has a combined capacity of 31.5bn cubic metres per year. For the first time, the pipeline handled more Russian gas bound for the EU and Moldova than Ukraine in 2024, with deliveries increasing by 23% to 16.7 bcm, according to calculations made by the Moscow-based Vedomosti newspaper. Most of the rest of its capacity is used to serve the Turkish market. 

In comparison, only 15.4 bcm of Russian gas was delivered to Europe via Ukraine, according to Vedomosti, while overall Russian shipments climbed 14% to 32.1 bcm.

Russia now pipes only a fraction of the amount of gas to Europe compared with pre-war volumes of 140 bcm it used to send, The Bell notes. In 2022, at the height of Europe’s energy crisis, when gas prices exceeded $1,000 cubic metres, Russia’s state gas monopoly Gazprom was earning $8bn per month from European gas sales, according to The Bell. For the whole of 2024, its revenues are expected to reach only $10bn.

Revenues have declined further, following the expiry of Ukraine and Russia’s transit contract. While Russia had been willing to renew the deal, Ukraine repeatedly insisted it would not do so. EU authorities, which played a critical role in brokering the original contract at the end of 2019, had said they viewed an extension as unnecessary, arguing that those countries still dependent on Russian gas flow through Ukraine – namely Slovakia and some of its neighbours in Central Europe – had sufficient alternatives to offset a halt in transit.

 

No alternatives

Assuming that Ukrainian gas transit does not resume – despite Slovakia lobbying aggressively for this, with its Prime Minister Robert Fico threatening to cut electricity supplies and withhold aid to Ukraine if it does not allow continued flow – this leaves TurkStream. Even if some flow does resume, it is likely to be far lower in volume, and contingent on the outcome of expected Ukrainian peace talks between the Kremlin and the incoming Trump administration.

Before the war, Russian gas flowed to Europe via four routes. In addition to Ukraine and TurkStream, there was the 31.5 bcm per year Yamal-Europe pipeline running through Belarus and Poland to Germany, and the 55 bcm per year Nord Stream 1 pipeline under the Baltic Sea to Germany. The odds of either of these routes resuming flow in the foreseeable future look slim.

Sanctions and counter-sanctions imposed by Russia and Poland in 2022 have prevented the running of Yamal-Europe. Meanwhile, sabotage attacks, reported by the Wall Street Journal and other Western media outlets as having been carried out by a Ukrainian group, have rendered the two Nord Stream 1 strings inoperable, as well as one of the two strings of the non-commissioned 55 bcm per year Nord Stream 2 pipeline.

Given Poland’s tough stance against any resumption in Russian trade, and the fact that it already switched to non-Russian gas sources before the war, Warsaw is unlikely to allow Yamal-Europe to restart. Alice Weidel, a candidate for German chancellor hailing from the far-right Alternative for Germany (AfD) party, has advocated for a resumption of flow via the Nord Stream pipelines, presumably via the last undamaged string, but as The Bell notes, her chance of winning in the upcoming election on February 23 is slim.

According to experts who spoke with Vedomosti, TurkStream could supply up to a maximum of 20 bcm of gas annually to Europe, which is not nearly enough to replace the lost flow through Ukraine. Should those supplies be disrupted, the EU would lose a further 5.0-7.5% of its gas supply.

 

What next?

Lower Russian volumes have already fuelled a spike in European gas prices, with the front-month TTF price climbing to its highest level in over a year on January 2, reaching €50.3 per MWh ($547 per 1,000 cubic metres). The front-month contract closed on January 10 at €45 per MWh. Higher gas prices will further suppress gas demand in Europe, encouraging switching to alternative sources of energy and undermining industrial performance. Consumption levels are already significantly lower than the pre-war level, with demand coming to only 56 bcm in the third quarter of 2024, which was roughly the same as in the same period of the previous year, but down from 64.4 bcm in the third quarter of 2021.

The EU’s options for replacing lost Russian gas supply are mostly limited to LNG. Norway, which is now Europe’s top gas supplier from the steep drop in Russian flow over the last few years, is already exporting at close to full production capacity. Azerbaijan and other pipeline suppliers also have limited extra production to spare. This may include more Russian LNG, EU purchases of which rose to a new record of 24.2 bcm in 2024.

As for Gazprom, the company has limited means of offsetting the loss of its exports to Europe with increased supplies to other markets. It began supplying gas to Uzbekistan in late 2023, and forecasts that volumes to the country and its Central Asian neighbours could reach 15 bcm per year in the future. It has also mooted delivering more gas to Turkey. It expects to launch gas supply to China via a new 10 bcm per year pipeline in the Far East towards the end of this decade, complementing supply via the 38 bcm per year Power of Siberia pipeline. But efforts to secure a supply deal with China to underpin construction of the much larger, 50 bcm per year Power of Siberia 2 pipeline, have so far been unsuccessful, with Beijing proving reluctant to commit to so much more gas. Meanwhile, Gazprom and other Russian companies are struggling to advance new LNG projects because of Western sanctions.