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Hungary-Romanian pipe delayed by governmental agreement

05 Jul 2010 17:20:34 | esgm

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The operation of a new interconnector between Hungary and Romania has been postponed, for a second time, due to delays in the respective governments signing an international agreement, FGSZ, the Hungarian transmission system operator (TSO), told ICIS Heren on Monday.

The Szeged-Arad pipeline, which will be able to flow 4.8 million cubic metres (Mm³)/day, had been scheduled to flow gas from 1 July, although the start date has been put back until 20 July at the earliest.

An international agreement was eventually signed between Budapest and Bucharest in mid-May, although this legislation did not come into force until 26 June, the TSO said. This, in turn, delayed the construction of the final section of the interconnector, which meant the pipe was not ready to begin operation at the start of the month, as previously suggested.

The pipe was originally scheduled to begin deliveries on 1 January 2010, but as representatives of both governments had not yet met, FGSZ and its Romanian counterpart, Trasgaz, agreed to push back the start date by six months.

The pipe only physically flows from Hungary to Romania, although backhaul will be an option.

Local subsidiaries of E.ON, MOL and GDF SUEZ have booked pipeline capacity on either side of the border with Petrom also booking capacity on the Romanian side. On the Hungarian side, EconGas and Global NRG have booked capacity too. Romanian gas company Romgaz is the notable exception from the list. Contracts are for a 20-year period.

According to FGSZ, the companies collectively have booked capacity worth 3.8Mm³/day. When the interconnector begins operating, the remainder of the capacity will be offered to the market by both TSOs.

FGSZ expects traders to ship gas from Baumgarten, via the Hungary-Austria Gasline (HAG), from Beregdaróc - on the Ukrainian border - and from Hungarian storage.

The interconnector has cost €32.31m to build.

HAG annual capacity

FGSZ said on Friday that it had finally allocated annual capacity through the Hungarian part of HAG, following a long-running dispute between the energy regulator, MEH, and government. An amendment in regulation regarding cross-border capacity booking, which took place after the tender started in April, caused the delay (see ESGM 21 April 2010).

As a result, FGSZ has allocated the capacity on a first-come, first-served basis, rather than through an auction process, as it had originally planned.

"The number of shippers having HAG capacity has not changed, only the size and share of their bookings is different," FGSZ said. TMM

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