Abandoning Russian gas costs Slovakia USD18 billion
(MENAFN) Slovakia could incur penalties totaling €16 billion (around $18 billion) if it ends its long-term gas contract with Russia’s Gazprom early, according to the country’s state-owned gas importer SPP, as reported by Reuters. This warning comes in light of the EU’s proposed REPowerEU plan, which aims to phase out Russian fossil fuel imports by 2028.
The legislation, backed by European Commission President Ursula von der Leyen, would prohibit new gas contracts with Russia starting in 2026 and end all long-term contracts by the close of 2027. While the Commission is exploring legal options to allow companies to invoke force majeure to terminate contracts without penalty, SPP cautioned that Gazprom might still demand compensation if a ban on imports across the EU is enforced.
Slovakia, heavily reliant on Russian gas for about 85% of its supply, has repeatedly warned that cutting off Russian gas could lead to higher prices across Europe and threaten energy security. Alongside Hungary, Austria, and reportedly Italy, Slovakia has opposed sanctions targeting Russian gas. Slovak Prime Minister Robert Fico condemned the phaseout plan as “economic suicide.”
Unlike sanctions requiring unanimous approval from all 27 EU members, this phaseout is set to be introduced as trade legislation needing support from just 15 countries to pass, Reuters noted.
Slovakia’s dependence on Russia grew after it switched to receiving gas via the TurkStream pipeline in February, following the halt of transit through Ukraine. The country had already seen a significant decline in Russian gas imports due to sanctions related to Ukraine and the Nord Stream pipeline sabotage in 2022.
The European Commission’s proposal now moves forward through the EU’s legislative process, requiring approval from both the European Parliament and the Council.
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