Hungarian storage injections limits reverse flows to Ukraine

24 July 2014 14:55 Source:ICIS

A surge in commercial storage injections into Hungarian sites has been restricting the amount of gas flowing towards Ukraine since the start of July, the latest data shows.

Volumes shipped from Hungary to Ukraine have dropped from an average rate of 8 million cubic metres (mcm)/day between 16-30 June to 3mcm/day so far in July. In the same period, Hungarian daily storage injections have ramped up by 9mcm/day to 13mcm/day. Deliveries to Ukraine from Poland have remained practically unchanged throughout June and July at an average rate of 3.6mcm/day.

Ukraine resumed importing gas over its western border from Poland in April and from Hungary in May following the onset of the geopolitical tension in Ukraine, which resulted in Russian supplier Gazprom cutting off supplies for Ukrainian consumption on 16 June.

The decrease in combined flows of gas from Poland and Hungary to Ukraine is temporary and will not have serious implications for Ukraine, Andrey Kobolyov, CEO of Ukraine’s state-controlled oil and gas company Naftogaz said on Wednesday in Kiev.

“This happened because of certain decisions on the government level in Hungary regarding volumes of gas to be injected into storage. We are receiving full amount via Poland,” Kobolyov said.

Hungary stocks

In June, the Hungarian government announced a number of decisions aimed at boosting storage stocks to secure natural gas supply ahead of the gas winter amid the recent geopolitical tension in Ukraine ( see ESGM 16 July 2014 ).

Hungary’s four commercial storage sites run by operator MFGT are now 25.9% full, which is still 1.5 percentage points behind the same day last year, although the current rate of injections has not been exceeded since at least the 2012/13 storage year.

MFGT data also shows that 2.2 billion cubic metres (bcm) of capacity (52%) has so far been booked by users for the 2014/15 storage year, the injection cycle of which has been extended by one month to 31 October. This exceeds the 1.8bcm (43%) total storage booking recorded in 2013/14 when stocks peaked at just 35.9% capacity.

Kobolyov also said that Ukraine is counting on reverse flow from Slovakia in September. This is considered the main route for Ukrainian imports from Europe. Jake Horslen and Katya Zapletnyuk

By Jake Horslen