Updated: Hungary to Ukraine natural gas flow nominations surge

22 May 2014 08:00 Source:ICIS

This story has been updated in the second paragraph with actual physical flows from Hungary to Ukraine on 20 May

Physical natural gas flows from Hungary to Ukraine have ramped up in recent days while it has also emerged French utility EDF has been granted a licence to trade gas in Hungary.

Last week Ukraine oil and gas incumbent Naftogaz said it signed a contract to begin importing gas from Hungary with an unnamed major European supplier ( see ESGM 15 May 2014 ). Physical flows into Ukraine from Hungary leapt up to 2.5 million cubic metres (mcm) on 20 May, according to data from Hungarian system operator FGSZ.

Since 1 September 2013, foreign companies have been able to take natural gas trading positions in Hungary without a physical presence in the country by using a limited trading licence.

The number of companies awarded this licence stood at 10 on 30 April 2014, but since then, major European supplier EDF has become the 11th company to be granted the licence, according to the most recent list published by the national energy regulator MEKH on 20 May.

EDF declined to comment on Wednesday if it was supplying gas to Ukraine from Hungary.

Flows to Ukraine

Shippers began nominating to flow gas from Hungary eastwards at the Beregdaroc interconnection point on 1 May, for the first time since the eruption of geopolitical tensions in Ukraine, with nominations between 1-19 May averaging 22,354 cubic metres/day.

German-based energy group RWE has confirmed it has been delivering small amounts of gas to Ukraine via Hungary during May. The company said it was not the party that signed the deal with Naftogaz last week. RWE also supplies gas to Ukraine via Poland and has said it will send gas via Slovakia when the Slovak pipeline begins operations later this year.

Between 1-19 May, data of physical flows from Hungarian transmission system operator FGSZ shows that just 122,460 cubic metres/day on 6 May and 145,665 cubic metres/day on 12 May was supplied to Ukraine.

But westbound flows from Ukraine into Hungary remain much stronger at an average of 19.3mcm/day so far in May. This gas is transported via Ukraine into Hungary and beyond to supply Russian producer Gazpromā€™s buyers in western Europe.

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

By Jake Horslen