KYIV, Sept 27 – Ukraine is facing a massive reduction or complete suspension of the transit of Russian natural gas to Europe via Ukrainian gas pipelines after Russia has signed a separate supply deal with Hungary, Serhiy Makohon, the head of the GTSOU gas shipper said Monday.

The deal is the second blow to Ukraine after Russia has recently completed Nord Stream 2, a sub-marine gas pipeline from Russia to Germany bypassing Ukraine, that may cost Ukraine up to $2 billion in annual transit revenue.

"A striking example of the Kremlin's policy towards Ukraine: as soon as it becomes technically possible to bypass Ukraine in the transit of gas, Gazprom launches gas through longer, but its own transit pipelines. Despite the contract, until 2024, we expect a significant further reduction or complete stop of transit to Hungary through Ukraine," Makohon wrote on his Facebook page.

Makohon said the technical completion of the Nord Stream 2 pipeline creates critical risks for the existing transit through Ukraine and the extension of the contract after 2024.

MVM Group and Gazprom Export in Budapest on September 27, 2021 signed a new long-term contract for the supply of gas to Hungary. The new document is designed for 15 years with the possibility of changing the conditions in 10 years. Hungary will receive 4.5 billion cubic meters of gas per year: 3.5 billion cubic meters through Serbia (through the TurkStream gas pipeline and its overland extensions) and 1 billion cubic meters - through Austria.

The Ukrainian Foreign Ministry expressed bewilderment and disappointment with Hungary's decision to sign a new long-term contract with Gazprom to supply gas bypassing the country.

The Foreign Ministry noted it is more profitable for Hungary to receive gas in transit through the extensive gas transportation system of Ukraine, which allows uninterrupted supply of gas to European countries by the shortest route.

"We view this as nothing but a political, economically unfounded decision, which has been made to the benefit of the Kremlin and to the detriment of national interests of Ukraine and Ukrainian-Hungarian relations, in violation of the principles of the Treaty of Neighborliness and Cooperation between Ukraine and the Hungarian Republic dated December 6, 1991," the ministry said.

The Ukrainian side will apply to the European Commission to assess the compliance of the new Hungarian-Russian gas agreement with European energy legislation. (om/ez)