Capacity all snatched up at Slovakia-Ukraine natural gas pipeline

03 July 2014 15:56 Source:ICIS

All but a small fraction of available capacity at the connection point to flow gas from Slovakia to Ukraine has now been booked, according to data from Slovak grid operator Eustream.

An open season, where suppliers could bid for capacity on the connection to Ukraine, ended on Friday and was hailed a success by Eustream.

The pipeline is expected to become a key source of supply to Ukraine after Russian producer Gazprom stopped providing gas to the country from 16 June.

From 1 October, 100% of the total 17 million cubic metres (mcm)/day of firm capacity has been booked until the end of February, according to data from the Slovak grid operator. During this time, 8.8mcm/day of the total 9mcm/day of interruptible capacity has been booked.

Under the contractual agreement Eustream signed with Ukrainian oil and gas incumbent Naftogaz in April ( see ESGM 28 April ), there will be no interruptible capacity available on the connection from March 2015. There is a small window from March until September 2015 where 25.9mcm/day of the total 26mcm/day firm capacity has been booked. Between September 2015 and September 2017, capacity is fully booked.

Eustream will start flowing gas one month earlier than the officially planned start-date of 1 October, although almost all of the available capacity has been booked on an interruptible basis.

Details of participating companies are not available from Eustream, due to confidentiality agreements. ICIS understands that despite the success of the open season, many smaller companies were unable to deliver on financial guarantees with Ukrainian counterparts.

The Vojany pipeline will connect into the Ukrainian grid at Budince, not far from the main transfer point for Russian gas entering Europe at Velke Kapusany, but it will be separate from the Velke Kapusany lines.

The final costs of the project are still being assessed, but it is understood the first phase of implementation will be just under €20m.

The second phase includes the procurement and permitting processes, which would be added to this cost. Miriam Siers

By Miriam Siers