Corrected: Ukraine’s Naftogaz to offer Budince gas capacity to others

Ekaterina Kravtsova

13-Oct-2015

(Comments from TrailStone in the penultimate paragraph have been corrected.) 

Ukrainian incumbent Naftogaz will allow other companies to use its capacity at the Budince border point, while it is waiting for a loan from the European Bank for Reconstruction and Development (EBRD) to be able to buy more gas from the EU.

A big European trader has already started to deliver gas to Ukraine using Naftogaz capacity, Yuri Vitrenko, Naftogaz managing director for international business, told ICIS, without naming the company. “But more companies are interested in doing this, so we have developed certain rules for those interested in using our capacity,” he said.

Naftogaz has booked 40 million cubic metres (mcm)/day of Budince capacity, and Vitrenko said that his company was not seeking to return this capacity to the Slovak grid operator Eustream. “We will need [the] full capacity again pretty soon,” he said.

For this reason, Nafotgaz will be buying gas at the Slovak VTP and then selling it to other suppliers at the Ukrainian border. These suppliers will be then delivering gas to Ukraine and selling it to consumers within the country.

In the first week of October, 8mcm of gas was delivered to Ukraine via the Budince point. The rate of reverse flows from Slovakia to Ukraine started to rise on 8 October and is currently 16mcm/day.

Vitrenko said that the rules for potential suppliers will be published on Thursday and that requirements will be “minimal”, with Naftogaz looking for companies with a certain credit rating.

In July, Naftogaz said US energy company Trailstone would commence operations in Ukraine in October. A Trailstone representative told ICIS that his company was currently delivering gas to Ukraine, but would also be interested in the Naftogaz offer to use its capacity.

Vitrenko said Naftogaz was not using full Budince capacity due to Ukraine resuming gas purchases from Russia. The company was also waiting for a financial loan from the EBRD that would allow it to buy European-sourced gas. The $300m (€264m) loan was approved by the bank late last month, with Naftogaz running a separate tender for European companies to deliver gas to Ukraine later this winter. ekaterina.kravtsova@icis.com

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