From UPSC perspective, the following things are important :
Prelims level: Urengoy-Pomary-Uzhgorod pipeline;
Mains level: Geopolitical tension in Europe;
Why in the News?
For over 40 years, Russian gas has been transported to Europe through Ukraine, but these supplies are set to cease on January 1, following Ukraine’s Naftogaz decision not to renew its most recent five-year transit agreement with Russia’s Gazprom.
Note: Student you can use this content in Prelims for facts related to map and mains exam for substantiate the argument related to geopolitical tension in Europe.
Do you know about the Urengoy-Pomary-Uzhgorod pipeline?
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What is the volume of gas supplied through Ukraine?
- Historical Context: At its peak, the pipeline system, including the Urengoy-Pomary-Uzhgorod pipeline, delivered approximately 201 billion cubic meters (bcm) of gas to Europe in 2018. However, this volume has drastically decreased over the years due to geopolitical tensions and the ongoing conflict in Ukraine.
- Recent Figures: In 2023, only about 15 bcm of gas was shipped through Ukraine, a significant drop from 65 bcm when the last five-year contract began in 2020.
What are the Possible Impacts?
- Economic Consequences for Ukraine: Ukraine is expected to lose up to $1 billion annually in transit fees due to the cessation of gas flows. To mitigate this loss, it plans to quadruple gas transmission tariffs for domestic consumers, which could burden its industry with additional costs exceeding $38.2 million per year.
- Impact on Gazprom: Russia’s Gazprom is projected to lose around $5 billion in gas sales as a result of this halted transit.
- European Energy Security: The European Union has prepared for this transition and does not anticipate immediate impacts on consumer prices.
- Countries like Slovakia and Austria have secured alternative gas supplies from sources such as Norway and LNG imports from the U.S. and Qatar.
- Hungary will continue receiving Russian gas through the TurkStream pipeline under the Black Sea.
TurkStream pipeline
- Energy Crisis in Moldova: The cessation has led to an energy emergency in Transdniestria, a breakaway region of Moldova that relies on these transit flows, resulting in cutoffs of heating and hot water supplies for residents
Way forward:
- Enhanced Energy Diversification: Europe and Ukraine should continue to strengthen alternative energy supply routes, including LNG imports and renewable energy projects, to reduce reliance on Russian gas and ensure long-term energy security.
- Support for Affected Regions: Provide immediate humanitarian and financial assistance to regions like Transdniestria and Moldova for energy infrastructure upgrades, while encouraging energy-efficient solutions to mitigate the crisis.
Mains PYQ:
Q What is the significance of Indo-US defence deals over Indo-Russian defence deals? Discuss with reference to stability in the Indo-Pacific region. (UPSC IAS/2020)
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