Brandov natural gas cross-border capacity in demand as OPAL decision delayed

The European Commission has made no decision on whether to allow Russian producer Gazprom a 100% third party access (TPA) exemption for the OPAL pipeline and talks will continue with the new commission team, Gazprom said on Wednesday.

The decision had already been postponed twice and was most recently expected by the end of October.

OPAL is the 36 billion cubic metre (bcm)/year pipeline which was commissioned in 2012. It takes Russian gas from the landing point of the Nord Stream pipeline at Greifswald in Germany down to the Brandov/Hora sv Kateriny point at the Czech border.

Under current EU rules and the third energy package requiring additional competition within the EU gas market, Gazprom and its affiliated company WINGAS are allowed to only access 50% of the OPAL pipeline. The rest must be offered to third parties.

At the end of last year, Gazprom and the German regulator BNetzA sent a request to the commission for a full TPA exemption on the OPAL pipeline. This would give Gazprom and its affiliates exclusive access to OPAL capacity.

Gazprom argues that as it is currently only allowed to use 50% of OPAL capacity, it is unable to run the 55bcm/year Nord Stream in full because of restrictions on the volumes of gas permitted via OPAL. The commission was expected make a decision in March, but has postponed the decision three times since then, citing further technical clarifications, according to Gazprom. It is perceived that allowing Gazprom full access to OPAL would improve security of supply as more gas could flow to Europe bypassing Ukraine.

However, data from transmission system operators (TSOs) show that as capacity is actually fully booked at the southern end of the pipe there is market interest in securing cross border capacity to flow gas to the Czech Republic via OPAL.

Market interest

Data from Czech and German TSOs show that some market participants have already booked some available capacity at the Brandov point where OPAL ends on the Czech border.

About 13.6TWh/hour of not exempted capacity at the Brandov exit point on the Czech-German border is booked until the end of November, according to the German operator OPAL Gastransport, while shippers have also booked about half of the available capacity until 2017 and further.

Data from Czech TSO Net4Gas shows that at the OPAL Brandov entry point to Czech Republic, there is no available capacity left for the coming two years.

Some market participants have told ICIS that they would be interested in that capacity once it became available. Capacity from Germany to Czech Republic has been in great demand during the past several month due to shippers’ interest in flowing gas to higher-priced markets in Slovakia and Ukraine.

Some traders active in the Czech market thus argue that barring third parties from accessing OPAL capacity would hurt competition in the markets. Lucie Roux