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EU Gas Firms Warned Over Seeking ‘Dangerous’ Russia Transit Deal

Railway wagons for oil and fuel at the marshalling yard in Batumi, Georgia, on Friday, May 10, 2024. Georgia's president warned the country may lose its chance to join the European Union if the government pushes ahead with a controversial “foreign agent” law in the face of huge protests. Photographer: Andrey Rudakov/Bloomberg (Andrey Rudakov/Bloomberg)

(Bloomberg) -- European Union Energy Commissioner Kadri Simson warned the region’s gas companies that any potential new deals to keep gas flowing from Russia through Ukraine would be a “dangerous” choice.

“There are no excuses, the EU can live without this Russian gas,” Simson said at a news conference following a meeting of energy ministers. “This is a political choice, and a dangerous one.”

A key gas transit agreement between Moscow and Kyiv expires on Dec. 31 and negotiations continue to try to keep flows coming through the pipeline. However, a deal doesn’t seem to be close with less than three months left to run. Both Kyiv and Moscow have said they’re willing to find a solution that could involve Azerbaijan, though fears have been raised about Russian supplies being furtively mixed in.

Simson, who is approaching the end of her mandate as energy chief, said that the European Commission was fully prepared for a zero-transit scenario thanks to alternative supply routes and strong levels of storage. Commission President Ursula von der Leyen has said that it’s up to Ukraine to decide on the future of the gas pipeline, while EU officials have said they would not enter into fresh talks.

The volume will need to be around 10 billion to 11 billion cubic meters to reach the levels needed for smooth shipment through Ukraine’s vast pipeline system, around five billion cubic meters less than currently, according to people familiar with the matter.

“The cost of dealing with Russia isn’t just measured in the price of gas,” Simson said. “But the lives lost.”

©2024 Bloomberg L.P.