Unnamed shipper signs Hungary to Ukraine natural gas supply contract

15 May 2014 13:57 Source:ICIS

Published on the ICIS Dashboard at 13:57

A major European supplier has signed a contract to begin exporting natural gas into Ukraine from Hungary from 21 May, Ukrainian oil and gas incumbent Naftogaz has confirmed.

Naftogaz would not disclose the name of the supplier, only saying it was “one of the largest European gas shippers”.

After Russian producer Gazprom increased the price of gas charges to Ukraine by 80% in April, spot gas purchased on European hubs has become significantly cheaper than Russian contractual volumes supplied by Gazprom for the Ukraine incumbent.

Shippers began nominating to flow gas from Hungary eastwards at the Beregdaroc interconnection point on 1 May. These were the first nominations seen at the border point so far this year.

At the time, 22,492 cubic metres/day was nominated to flow into Ukraine on 1 and 2 May. Actual flow data from Hungarian transmission system operator (TSO) FGSZ shows that 122,460 cubic metres/day on 6 May and 145,665 cubic metres/day on 12 May was supplied.

The interruptible transport capacity available for shippers to book towards Ukraine at the Beregdaroc interconnection point is 16.8 million cubic metres/day.

German-based energy group RWE started flowing physical gas from Poland to Ukraine in April ( see ESGM 15 April 2014 ). The gas supplies fell under an existing five-year contract between Naftogaz and RWE Supply & Trading signed in May 2012, which covered deliveries of up to 10 billion cubic metre (bcm)/year subject to individually agreed contracts. At the time, RWE said it would also begin providing gas to Ukraine through the Slovak border as soon as this was available.

ICIS understands Slovak TSO Eustream will hold an open season in May or June offering European suppliers capacity in the pipeline for shipping gas from west to east.

Last year, Ukraine imported around 2bcm of gas from EU member states via Poland and Hungary. Miriam Siers

By Miriam Siers