Czech to Slovakia natural gas flows increase after Lanzhot capacity expansion

Source: Heren

2014/09/23

Physical natural gas delivered in reverse flow from the Czech Republic into Slovakia averaged 41.5 million cubic metres (mcm) per day between 16-22 September, an increase of 42% compared to the same period last month, according to Czech grid operator NET4GAS data.

This summer, NET4GAS said it anticipated higher demand for reverse flow capacity this autumn and added about 5mcm/day to the cross-border capacity from 16 September bringing the total capacity of the pipeline at the Lanzhot border point to 780GWh or 75mcm/day.

The decision to increase the capacity was based on high demand for additional reverse flow capacity in the first half of 2014 and was also designed to mitigate potential decrease of gas transit through Ukraine this winter, NET4GAS said in August ( see ESGM 6 August ).

Previously, physical gas delivered in reverse flow from the Czech Republic into Slovakia hit record highs in March, averaging 31.6mcm/day, according to NET4GAS data ( see ESGM 10 April ). Flow rates peaked at 43.3mcm/day on 13 March.

At the time, the March daily average was a huge increase from 1.9mcm/day in March 2013. During the same month in 2013, the connection point was largely in forward mode.

In August, gas flowed to Slovakia at an average rate of 20.9mcm/day. Between 16-22 August, gas flowed into Slovakia at a rate of 29.2mcm/day. From when the increased capacity was initiated on 16 September to 22 September, this flow rate increased to 41.5mcm/day.

NET4GAS had said earlier it expected demand for reverse flow capacity to increase this winter. Traders active in the Czech market have told ICIS that higher flows to Slovakia at Lanzhot are related to European suppliers flowing gas further east in reverse flow via Slovakia to Ukraine. In addition, Slovak Day-ahead has been trading at a more than €2.00/MWh premium over its Czech peer proving incentive for arbitrage trading between the two markets.

Before the launch of Nord Stream and the Czech Gazela pipeline Lanzhot used to flow about one half of Russian gas entering Europe from Ukraine via Slovakia to the Czech Republic, with the remaining half going to Austria.

However, flow patterns have changed now with Russian gas entering the Czech Republic via Gazela from Nord Stream. Miriam Siers