MOSCOW, Dec 31 (Reuters) - Russia's Gazprom said it will

pump a reduced volume of gas to Europe via Ukraine on Tuesday,

the last day before the expiry of a deal that had kept the gas

flowing throughout nearly three years of war.

Gazprom said it would send only 37.2 million cubic

metres on Tuesday compared to 42.4 mcm on Monday. Flows are

expected to fall to zero from the early hours of Jan. 1 after

the expiry of the five-year transit agreement.

Its demise marks the almost complete loss of Moscow's

once mighty hold over the European gas market. Ukraine refused

to negotiate a new deal because of the war.

The halting of supplies via Ukraine will be a major blow

to Moldova, a country that was once part of the Soviet Union.

Among European Union countries, Slovakia will be the most

affected.

Hungary will continue to receive Russian gas from the

south, via the TurkStream pipeline on the bed of the Black Sea,

although it had been keen to keep the Ukrainian route as well.

Ukraine is giving up some $800 million a year in fees

from Russia, while Gazprom will lose close to $5 billion in gas

sales to Europe via Ukraine.

Russia and the Soviet Union spent half a century

building up a major share of the European gas market, which at

its peak stood at 35%, but the war in Ukraine has all but

destroyed that business for Gazprom, Russia's state-controlled

gas giant. It plunged to a net loss of $7 billion in 2023, its

first annual loss since 1999

Moscow has lost out to rivals such as Norway, the United

States and Qatar since the 2022 invasion of Ukraine, which

prompted the EU to cut its dependence on Russian gas.