Ukraine faces an unprecedented energy crisis after the loss of coal mines and shale gas fields in war-torn regions, and Russia’s push to bypass it as a transit country for natural gas to Europe, the International Energy Agency (IEA) has warned, quoted by Euractiv.com.

Russia’s annexation of Crimea further hit domestic energy production in Ukraine, according to an IEA report, as a Gazprom boss cautioned against any European Union attempts to block new pipelines. Russia’s energy minister said his country would not renew transit contracts with Ukraine, and there were reports of fresh fighting in separatist-held territory.

“Ukraine is confronted with unprecedented challenges as it faces geopolitical, economic, financial, humanitarian and energy crises at the same time”, the IEA report on Eastern Europe, the Caucasus and Central Asia said.

Since it erupted last year, the Ukraine crisis has hit energy imports and denied Ukraine revenue from transit costs, according to the IEA. It warned that new pipelines bypassing Ukraine, such as the mooted Turkish Stream through Turkey and Greece, could ultimately strand “severely ageing” Ukrainian gas infrastructure. That infrastructure will need huge investment to handle future lower volumes of gas transit, the IEA said.

Ukraine is currently the largest transit country for natural gas in the world. About 40% of Russian gas supplies to Europe go through Ukraine, which has needed two international bailouts since 2008, most recently last year. Ukraine’s stability was important for the EU’s energy security, the IEA said. In 2014, as relations worsened after the ousting of Kremlin-backed Ukranian President Viktor Yanukovych, Russia turned off the taps. The resulting shortages in the EU gave political impetus to the Energy Union project, which aims to bolster the bloc’s resilience to such shocks.