Hungary-Ukraine natural gas flow surges after Gazprom cuts supply

Natural gas flowing from Hungary into Ukraine surged this week, after Russian producer Gazprom halted supplies to from Russia to Ukraine on Monday morning, transmission system operator (TSO) data shows.

For as long as Russia stops flowing gas to Ukraine, the embattled country will rely on gas flow from European entry points at Hungary and Poland on its western border, as well as gas already in Ukrainian storage.

According to Hungarian system operator FGSZ, physical gas flow from Hungary to Ukraine jumped to 8.6 million cubic metres/day (mcm) on Monday, 16 June when gas supply from Russia to Ukraine was cut. This is up from the previous week’s average of 7.4mcm/day. On Tuesday and Wednesday, 8.5mcm/day of gas was transported to Ukraine from Hungary.

Similar volumes were nominated to flow from Hungary to Ukraine on Thursday and Friday, but physical flow data was not available on Friday.

During the previous week, an average of 7.4mcm/day of gas was supplied to Ukraine via Hungary and in the first week of June, an average of just 2.7mcm/day flowed to Ukraine from the connection.

Gas flowing from Poland into Ukraine have not risen significantly this week, according to Polish system operator GAZ-SYSTEM. Flow from Poland has averaged 3.4mcm/day throughout June.

German supplier RWE is currently contracted to send gas to Ukraine via Hungary and Poland and in May, Ukrainian oil and gas incumbent Naftogaz said it had signed a contract to begin importing gas from Hungary with an unnamed major European supplier ( see ESGM 15 May ).

Another entry point for gas to flow to Ukraine from Europe will be Slovakia from September. An open season for companies interested in flowing gas from this point is currently being held by Slovak TSO Eustream ( see ESGM 30 May ). The open season was scheduled to finish on Monday 23 June, but this deadline has been extended to Friday.

Ukraine currently has 13.5 billion cubic metres of gas held in storage sites, according to the latest figures from Gas Storage Europe, which were last updated on 13 June by Naftogaz.

Gazprom halted supplies to Ukraine on Monday after weeks of negotiations between the EU, Ukraine and Russia failed to result in an agreed price that Ukraine would pay for Russian gas. The embattled country owes a debt of around $4.5bn (€3.3bn) to Gazprom but refuses to pay, saying Russia is over-charging Ukrainian incumbent Naftogaz. Ukraine is now on a pre-payment plan for gas supplied from Gazprom, and so will not receive any gas in does not pay for in advance. No gas has been supplied to Ukraine since Monday.

Gas flowing to Europe transiting through Ukraine has remained stable throughout the week, according to TSO data. Miriam Siers