Updated: GDF Suez confirms natural gas supply to Ukraine via Hungary

25 June 2014 17:09 Source:ICIS

French utility GDF Suez has signed a commercial agreement with Ukraine to supply gas to Ukraine at the Hungarian border point, a spokeswoman from GDF Suez has confirmed.

Ukraine now relies solely on west European connections for gas supply through its western border since Russian supplier Gazprom stopped providing gas to the country on 16 June due to unpaid gas debts.

“We have concluded a commercial agreement with Ukraine about limited volumes of natural gas during a determined period,” the GDF Suez spokeswoman said. She said no more details on the deal were able to be provided.

This news means that the unnamed shipper that Naftogaz signed a contract with to begin importing gas from Hungary in May is likely to have been GDF Suez.

Gas flowing from Hungary into Ukraine surged during the week of 16 June, when Russian producer Gazprom halted supplies to Ukraine. However, Hungarian transmission system operator FGSZ’s data shows that physical gas flow from Hungary has fallen this week.

On Monday, 5 million cubic metres (mcm)/day of gas travelled to Ukraine from Hungary and on Tuesday, 6.5mcm/day flowed. This compares to last week’s average of 8.6mcm/day.

Naftogaz chairman Andrew Kobolyev said it was working with GDF Suez, as well as German utility RWE, in a statement published on Tuesday evening. He also said Naftogaz has received “proposals for cooperation” from other major energy companies.

Alternative routes of gas supply to Ukraine, apart from Russia, are through the Hungarian and Polish borders. Gas will be able to flow from Slovakia into Ukraine from September. Slovak system operator Eustream is currently running an open season where suppliers can bid for capacity on the connection point, but has extended the deadline to Friday from Monday at the request of shippers.

Talks between the EU, Russian and Ukrainian energy ministries regarding the supply of gas to Ukraine from Russia’s Gazprom continued on Wednesday. Miriam Siers and Lucie Roux

By Miriam Siers