- Ukraine must reach a new deal with Russia to continue transiting gas to Europe
- Russia is uninterested in a grand bargain but may need to rely on Ukrainian pipelines given rising European demand
- New pipelines could allow Russia to circumvent Ukraine, but they are not yet completed
- Energy sector reforms and compliance with new EU regulations could benefit the Ukrainian gas industry
With a key contract expiring in 2019, Ukraine’s status as the conduit for Russian gas to Europe is uncertain. European Union member states, the European Commission and German Chancellor Angela Merkel have all insisted that Ukraine’s gas transit status needs to be maintained, not only past 2019 (when Russia’s current agreement with Ukraine ends) but also in the long term. The European Commission has repeatedly called for talks to seek a guarantee from Russia on Ukraine’s future gas transit status and other related issues beyond next year. Despite assurances from Russia that it is interested in an extension of the status quo, at least until Nord Stream 2 and the two TurkStream pipelines are completed, the negotiations have yet to come to an agreement.