LONDON (ICIS)--Ukraine, Romania and Bulgaria are vying to offer long-term transmission capacity for Russian gas exported to Hungary after Hungary said it signed a 15-year contract with Gazprom at the end of week 22.
Hungary’s existing 4.2 billion cubic metre/year contract with Gazprom will expire at the end of September 2021, which means the country has been looking to secure new volumes.
It is not clear how much Hungary may import under the new agreement but a source close to discussions said the Hungarian buyer, possibly Panrusgaz, may have secured similar quantities as those currently imported.
Panrusgaz, a joint venture between Gazprom Export, the Hungarian electricity company MVM and Gazprombank’s Centrex, has been the historical importer of Russian gas in Hungary.
Neither Gazprom Export nor Panrusgas replied to ICIS by publication time.
Questions are now raised about the route Gazprom will use to export gas to Hungary.
So far, the country has been importing Russian gas via Ukraine.
However, with the completion of the TurkStream corridor at the beginning of 2020, Gazprom said volumes would be shipped via a new route stretching from the Turkish north-western Black Sea coast to Hungary via Bulgaria and Serbia.
The Balkan route is expected to be fully complete by 1 October when the Serbian-Hungarian link is scheduled to be commissioned.
This means Hungary could start importing volumes via this southern route as early as October although the existing agreement with Ukraine is in place until 2024.
Even so, a third possibility is now emerging.
Romania doubled its Russian offtakes in the first five months of 2021 compared to the same period last year and some of these volumes are thought to have been shipped further to Hungary.
Most of the Russian imports entered the country via the Negru Voda 1 interconnection point with Bulgaria. This suggests that Romania is using the old border point along the Trans-Balkan pipeline to receive Russian gas before directing it westward to Hungary.
There are expectations that Romania would continue to be a transmission corridor for Russian gas to Hungary even though the country was not included in the TurkStream-Balkan transmission corridor when it was initially announced in 2014.
On Monday, Transgaz, its Ukrainian counterpart GTSO and the Bulgarian and Serbian gas grid operators offered annual capacity for anything between five to 15 years. The yearly capacity was offered as part of a calendar set by the European Network of Transmission System Operators for Gas and is due to be tendered on 5 July on the Hungary-based RBP auctions platform.
Although all European gas grid operators were expected to finalise their offered capacity by the end of the day on Monday, there were already indications that eastern European operators would be vying for transmission capacity to Hungary.
The Ukrainian transmission system operator GTSO told ICIS it would offer firm unbundled capacity for the next 15 years at the Bereg interconnection point with Hungary. The capacity would be 17.9 million cubic metres/day (mcm) (189GWh/day) until 2025 and increased to the pipeline’s maximum capacity of 44mcm/day (464GWh) between 2026-2036.
Meanwhile, the Romanian grid operator offered on the Romanian-Hungarian border a maximum of 29GWh/day of firm bundled capacity between gas years 2022 and the end of the gas year 2025/26 and 22GWh/day from 2027 until the end of gas year 2030/31. Transgaz offered 22GWh/day of bundled firm capacity for the gas year 2021/22.
It also offered unbundled capacity on the same border which is set to increase incrementally from 24GWh/day in the gas year 2021/22 to 40GWh/day by the end of the gas year 2027/28. The capacity is higher than that offered in previous years.
Most of the Russian gas imported into Romania is likely to enter the country via the Negru Voda 1 – Kardam interconnection point, where Transgaz is now offering annual border capacity of 169GWh/day for the next five years.
The Bulgarian grid operator, Bulgartransgaz offered 40GWh/day of firm unbundled exit capacity to Serbia until 2026.
The figures published on RBP were correct as of 14:30 hours UK time but may be adjusted before the end of the day.