December “test” capacity on Hungary/Slovakia natural gas pipe offered

Magyar Gaz Tranzit (MGT) has offered shippers test natural gas transmission capacity on the prospective Hungary/Slovakia pipeline for the month of December, according to a document on the pipeline operator’s website.

The bi-directional pipeline is due to become fully operational on 1 January 2015, but shippers are able submit requests for a limited allocation of interruptible monthly capacity for December, before 3 November 2014. The monthly capacity will be subject to interruptions in excess of 25 days.

The MGT offer comprises 204m MJ/day (5 million cubic metres(mcm)/day) capacity from Slovakia to Hungary and 3.4m MJ/hour (2mcm/day) from Hungary to Slovakia for the period 1 – 31 December 2014.

The pipeline is expected to have an initial capacity of 4 billion cubic metres (bcm)/year in the direction of Hungary and 1.6bcm/year in the direction of Slovakia when it launches in January.

The notice also states that shippers are not required to book capacity at the Vecses interconnection point linking the network operated by transmission system operator (TSO) FGSZ to the MGT run grid in Hungary, but must have a contract in place with FGSZ to deliver gas into its system. Successful shippers will have an equal capacity contract on the Slovak side confirmed by the relevant TSO Eustream.

Tariffs will be calculated according to the latest decree from Hungarian regulator MEKH, which states that interruptible monthly capacities that are subject to more than 25 days disruption incur a charge equal to 10% of the firm monthly capacity tariff, which itself is 50% of the firm annual tariff for one month in the winter period.

According to the latest decree from MEKH, the current annual transmission tariffs for the pipe stand at Hungarian forint (Ft) 24.37(€0.08)/MJ/day/year, to enter Hungary and Ft 199.6(€0.65) /MJ/hour/year to exit Hungary.

This means that, on an interruptible (25+ days) monthly basis, it will cost participants €14.2 to deliver 1 MWh into Hungary each day for the duration of the month and €4.85 to deliver 1 MWh into Slovakia each day in the same period, or, in other terms, it will cost participants €0.59/MWh to ship into Hungary and €0.20/MWh to deliver gas to Slovakia.

An open season for transmission capacity from 1 January 2015 is still yet to be announced. Jake Horslen