End to Gas Transit Deal Via Ukraine Could Impact German Industry

Germany warns of industry wind down or even shutdown if Russian gas stops flowing through Ukraine when the existing transit agreement expires in Dec 2024 according to Economy Minister Robert Habeck.

• Habeck said that policymakers should avoid “making the same mistake again” of assuming that the economy will be unaffected without precautions to secure energy supplies.
• Rules on sharing gas in the event of potential gas shortages in Eastern Europe could result in Germany exporting gas to offset the deficit caused by a halt to supplies. This could result in manufacturers in Germany seeing their supply restricted or cut.
• Additional capacity including new LNG import terminals will therefore be essential to maintain supply to both Eastern Germany and Eastern Europe, he added.
• It is unlikely that the current transit agreement will be extended under similar conditions given the lack of political support, according to the Center on Global Energy Policy last week.