Ukraine does not intend to auction gas-transmission capacity upon conclusion of transit agreement with Russia

AMSTERDAM. April 23 (Interfax) - Ukraine does not intend to renegotiate with Russia to extend the contract, which ends in 2024, on transiting Russian gas to Europe, and also does not plan any deals, Ukrainian media reported, citing a statement from Andrei Prokofiev, head of the division for client cooperation at Gas Transmission System (GTS) Operator of Ukraine, during the Flame conference.

Prokofiev said that the lack of deals from a practical point of view means that Ukraine "will not offer any capacity at auction."

The current transit contract between Gazprom and Naftogaz of Ukraine was concluded at the end of 2019 through the end of 2024. It provided for the transit of 65 billion cubic meters on a "transport or pay" basis in 2020 and 40 bcm in subsequent years. However, OGTSU declared force majeure on the acceptance of gas for transit through part of its gas pipelines in 2022 and currently ensures the acceptance of no more than 42.4 mcm per day (15.5 bcm per year).

The European model for booking gas transportation capacity provides for distribution not via long-term contracts, but through auctions. The next booking auction in 2025 on the European industry calendar is scheduled for July 1, according to some booking platforms. Capacities can also be offered at quarterly, monthly and daily auctions.