Ukraine to abandon gas imports and preparing for zero transit - IMF's Memorandum

"Restrained domestic consumption and growing domestic production limited the need for gas imports during the past heating season. For the next heating season in 2024/25, the authorities do not plan additional gas imports for domestic consumption, including due to Naftogaz's expanded production capacity," the document states.

At the same time, Ukraine will be able to accept an additional 3 billion cubic meters of gas for storage by non-residents for the needs of EU countries.

"The updated strategies of the GTSO and transmission industry appropriately reflect the new operating environment by seeking to rightsize the system and identifying alternative sources of gas supply," the document states.

This will be crucial for the GTSO in terms of financial and operational preparation for the scenario of zero transit when the transit contract expires at the end of 2024.

"In particular, we will adopt draft law #6133 that allows for a special regime of operations for GTSO to reduce its operational expenditures and maintenance for non-critical gas transmission purposes," the Memorandum states.

Transit agreement

The current transit agreement between NJSC Naftogaz of Ukraine and Russian Gazprom was concluded at the end of 2019 and will last five years. Despite the war, Ukraine allows Russian gas to pass through its territory to countries such as Austria, Slovakia, Italy, and Hungary.

The Ukrainian government has repeatedly stated that it does not plan to extend the contract.

According to the Ministry of Energy, stress tests of the Ukrainian gas transportation system and underground gas storage facilities were conducted in 2023. The tests showed that the system can function without transit.

Earlier, the head of NJSC Naftogaz of Ukraine, Oleksiy Chernyshov, stated that Ukraine, for the first time, passed the winter of 2023/24, using only its gas for the heating season.