Ukraine, Slovakia to offer virtual reverse gas flow from March

Aura Sabadus

28-Feb-2020

LONDON (ICIS)–The Ukrainian and Slovak transmission system operators will start offering virtual reverse flows for the first time ever on a border point previously used by Russia’s state-owned producer Gazprom.

Ukrainian system operator GTSO and Slovakia’s Eustream said on Friday that 10 million cubic metres (mcm)/day (104GWh/day) would be available for backhaul at Ukraine’s largest Velke Kapusany/Uzhgorod interconnection point from 1 March.

The service is offered on an interruptible basis because it is subject to the availability of physical onward flows from Ukraine to Slovakia.

The two operators said the volumes may be increased if there is enough market interest. Currently, front month Ukrainian prices on the virtual trading point (VTP) hold a €2.00/MWh premium over their Slovak counterparts, making reverse flows attractive.

The 281mcm/day border point had been historically used by Gazprom to transit Russian gas via Ukraine and Slovakia to European customers.

The Uzhgorod point is now under the control of GTSO after a 10-year legacy transit agreement with Gazprom expired on 1 January 2020.

GTSO and Eustream signed an interconnection agreement based on EU rules on the final day of 2019, making virtual reverse flows available on this border.

Already in the first week of January, Slovakia was a net exporter to Ukraine via Budince, the other interconnection point between the two countries.

GTSO and its Polish counterpart Gaz-System have already started virtual reverse flows in January. Both firms expect to merge the existing interconnections on the border into a virtual interconnection point by June.

There are similar plans for the Ukrainian-Hungarian border points.

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