Slovak gas importer warns of massive penalties if forced to abandon Gazprom deal early
Slovakia risks penalties of up to €16 billion ($18 billion) if it terminates its long-term gas contract with Russia’s Gazprom under the EU’s proposed energy phaseout plan, according to a report by Reuters.
The REPowerEU strategy, championed by European Commission President Ursula von der Leyen, aims to end EU dependence on Russian fossil fuels by 2028. The plan would ban new Russian gas contracts from 2026 and phase out long-term agreements by 2027. While the EU is exploring legal measures to allow companies to invoke force majeure (avoiding penalties for contract breaches), Slovakia’s state-owned SPP warns that Gazprom could still demand compensation.
Slovakia’s Heavy Reliance on Russian Gas
Slovakia, which gets 85% of its gas from Russia, has strongly opposed the EU’s plan, calling it "economic suicide." Prime Minister Robert Fico has joined Hungary, Austria, and reportedly Italy in resisting sanctions on Russian gas, which currently require unanimous EU approval. However, the phaseout plan could pass with just 15 out of 27 member states, as it would be implemented as trade legislation rather than sanctions.
Energy Security at Risk
Since Ukraine halted gas transit through its territory earlier this year, Slovakia has relied on TurkStream, a pipeline bypassing Ukraine, to maintain supplies. The country had already seen reduced Russian gas flows due to Ukraine-related sanctions and the 2022 Nord Stream pipeline sabotage.
The European Commission’s proposal will now undergo the EU’s legislative process, needing approval from both the European Parliament and the Council of the EU. If passed, Slovakia—and other dependent nations—could face severe financial and energy security challenges.