Russia can cut Ukraine out of new gas deal, Kiev’s energy czar says, as long as Moscow keeps handing over cash for transit rights

The head of Ukraine’s state energy giant has admitted that Russia's new deal to transport gas directly to Hungary without using Kiev’s network of pipes is perfectly legal, as long as Moscow keeps paying for the privilege anyway.

In a statement issued on Friday, Naftogaz Chief Executive Yuri Vitrenko said the decision to cut his country out of the new arrangement was within Russian energy exporter Gazprom’s rights under the terms of contracts signed between the two companies. Instead, supplies will be shipped through the Balkan Stream pipeline, which runs under the Black Sea.

However, he insisted that Moscow would be liable to cough up funds agreed under previous deals regardless. “Gazprom has the right not to supply gas for transit using capacity it has reserved, but will have to pay for the capacity anyway, in line with the ‘pump or pay’ principle,” he wrote.

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At the same time, though, Vitrenko blasted the fact that the Russian side could “choose the route from Russia to [Central] Europe themselves,” claiming that Moscow was using gas as “ammunition” against Ukraine. He added that he believed the row was a sign of things to come for when the completed Nord Stream 2 pipeline is finally online.

“We publicly and privately warned our partners in Germany and the USA that this could happen, and that ending the physical transit through Ukraine will create huge threats to Ukraine and Europe,” Vitrenko added. Which dangers he was referring to were unclear.

Vitrenko’s statement comes on the heels of an outcry in Kiev after Russia began pumping its gas to Hungary via the underwater link, bypassing Ukraine. On Monday, a statement was issued by Ukraine’s Foreign Ministry saying that the new gas deal with Budapest was a “purely political, economically unreasonable decision.”

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Kiev has previously warned that it stands to lose out to a far greater extent because of Nord Stream 2, with President Volodymyr Zelensky claiming his country will be $3 billion out of pocket annually.

However, Hungary was quick to rebuke criticism of the deal, saying that Ukraine had no grounds to interfere and claiming that Kiev was meddling in its political affairs despite having “nothing to do with those we make deals with,” according to Foreign Minister Péter Szijjártó.

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