Ukraine and Russia have signed a new five-year gas transit agreement. As part of the agreement, Ukrainian oil and gas company Naftogaz, through its subsidiary Ukrtransgaz, will book transport capacities for Gazprom to deliver 225 bcm of gas to Europe through Ukraine over the five-year period, including 65 bcm in 2020 and 40 bcm/year over the 2021-2024 period. Gazprom also agreed to pay Naftogaz US$2.92bn, as ruled during an arbitration procedure by the Stockholm Chamber of Commerce (SCC) in 2018; in turn, the two companies will drop their other legal claims against each other. In addition, the Ukrainian gas transmission system operator has signed agreements with all neighbouring operators to ensure gas transit to Poland, Hungary, Romania, Moldova, and Slovakia.
Ukraine is an important transit route for Russian natural gas to Europe through the Ukrainian Gas Transmission System (GTS), operated by Ukrtransgaz. Ukraine has significant interconnection capacities with Russia (import capacity of 246 bcm/year and export capacity of 32.5 bcm/year). The volume of Russian gas transiting through Ukraine reached 87 bcm in 2018 (-7% compared with 2017). The tensions between the two countries led to the interruption of Russian gas supply to Ukraine in November 2015. Ukraine relies on its gas stocks and has managed to diversify its supply routes with imports from EU countries (Poland, Hungary, and Slovakia). Russia is currently developing two gas pipelines, Nord Stream 2 and TurkStream, aimed at circumventing Ukraine.