Capacity on Serb gas transit pipe linked to TurkStream offered

09 March 2018 17:04 Source:ICIS

An affiliate of Russia’s Gazprom has launched a non-binding open season for capacity on a proposed natural gas transit pipe that would run from Bulgaria, through Serbia and into Hungary.

The pipe, which is being developed by Serbian GASTRANS, would provide a corridor through southeastern Europe which could ultimately carry Russian volumes arriving via Turkey and the TurkStream pipe.

If realised, the pipe would provide the necessary infrastructure for Gazprom to deliver volumes to the region without transiting gas via Ukraine.

GASTRANS has said the pipeline should be operational from 1 October 2019. This is just months after TurkStream – which will connect Russia and Turkey via the Black Sea – is due to start flowing.

The first TurkStream string has been earmarked for Turkish deliveries, with a subsequent second line expected to deliver gas into European markets.

The proposed start-up of operations also coincides with when Gazprom’s existing transit contract with Ukraine is formally due to end. The Russian exporter has just begun the process of terminating this contract, so Ukrainian transit flows may end even sooner.

GASTRANS, which is owned by South Stream Serbia, submitted a request to waive its third-party access and unbundling obligations on 2 February. On 9 February, Serbian energy regulator AERS ruled it will decide at a later date on these exemptions to EU regulations.

The open season commenced on 5 March and will run until 15 April. The operator is looking for bids in the duration of 5, 10, 15 and 20 years in length.

The pipe will have an entry point on the Serb-Bulgarian border and then three exit points within Serbia. A fourth point will exit on the Hungarian border.

In December 2017 an intergovernmental agreement between Russia and Serbia concerning gas supply was amended.

Two months earlier, the Hungarian foreign minister said that by the end of 2019, around 6 billion cubic metres of gas/year will start to flow on the southern border of Hungary.

In July 2017, Gazprom signed agreements with Serbia, Hungary and Bulgaria on developing their infrastructure and upgrading cross-border capacity to allow the onward flow of gas to the region delivered to Turkey.

Gazprom has previously expressed its unwillingness to operate pipeline infrastructure within the EU, following a number of years of limited access to the OPAL pipe in Germany. david.simon@icis.com

By David Simon