Austrian E-Control seeks clarity on Romanian gas supply route

10 May 2018 16:13 Source:ICIS

BUDAPEST (ICIS)--Austrian energy regulator E-Control has called for larger clarity around the possible transport routes to deliver Romanian Black Sea gas to the Austrian VTP hub in the coming years, a source close to the matter told ICIS.

The watchdog has asked for clear commitment from Hungarian counterpart MEKH to decide whether to support the planned capacity upgrade on the Mosonmagyarovar border point or to back the proposed Hungary-Slovakia-Austria (HUSKAT) project.

The source said that MEKH was supposed to publish its decision on the capacity upgrade along the HAG pipe by early May, which is based on the outcomes of the EU-wide non-binding demand assessment for incremental capacity conducted in October 2017.

Currently, the 14.4 million cubic metres/day capacity HAG only able to deliver gas from Austria to the direction of Hungary but the results showed that there was market interest to upgrade the border point to become bidirectional.

Initially, this would have also enable Romanian supply to enter the Austrian network in the future by constructing new infrastructure in Hungary as the cornerstone of the original BRUA project.

But Hungarian network operator FGSZ and Romanian counterpart Transgaz amended the project framework later and launched the ROHU development, which registered high interest from the market and cut the planned BRUA pipe short in Hungary.

The source said that E-Control has green lighted the project following the request for approval from Austrian grid operator Gas Connect. But MEKH has not yet published any decision on Hungary’s behalf by the deadline required by the bloc’s network code on capacity allocation mechanism, which is prerequisite for the development to go ahead, he added.

“MEKH has not yet taken a decision, which can be seen as a negative decision,” said the source.

“The clear disagreement would call for a harmonization between the two watchdogs according to the European regulations, that did not take place. E-control made its decision on a unilateral basis,”according to a second source.

Alternative

Meanwhile, MGT, the current operator of the HU-SK interconnection point, Slovak counterpart Eustream and Gas Connect Austria proposed the HUSKAT project.

This will utilise the unused Hungary-Slovakia interconnector by linking existing infrastructure in Slovakia and Austria and deliver up to 5.2 billion cubic metres/year westwards under yearly firm capacity from gas year 2022 to gas year 2036.

FGSZ previously said that it is in acquisition process of MGT, in line with a Hungarian government decree back in December 2017. FGSZ added that it is looking to go ahead with the HUSKAT project, in accordance with another government decree from late April. The project is aimed at saving costs and avoiding construction of any redundant infrastructure, according to FGSZ.

But the first source said that allocation of long-term capacity for HUSKAT in this year’s annual capacity auction might be threatened by the lack of consultation required by the relevant network code.

He added that E-Control has been supportive of both projects but needs clearer commitment from the Hungarian side.

Reactions

The second source said that MEKH had already made a decision on 2 May by going ahead with the HUSKAT project on the basis of cost efficiency and the request from market participants, however the resolution has not yet been published.

He also added that MGT will launch a consultation on HUSKAT in May, which would not interfere with the capacity allocation network code as the project falls under the alternative allocation mechanism.

By David Simon