On maintenance of the pipeline near UA-SK border

July 2, 2020, Kyiv – LLC “Gas TSO of Ukraine” welcomes Eustream’s decision: to offer additional capacity at the entry IP Velke Kapusany in the amount of 60 million m3 / day till October 1. It will guarantee that all interested companies will be able to timely deliver the planned volumes of gas from Slovakia to Ukraine for storage in Ukrainian underground facilities in August-September.

Possibility of a virtual reverse at the IP “Velke Kapusany” has been established since March 1, 2020; however, Eustream did not offer higher capacities to the market. We believe it is possible to offer the market intermittent capacity of up to 110 million m3 / day, which corresponds to the volume of gas transportation through this point from Ukraine to Slovakia. It also makes sense to extend the duration of such an offer, allowing traders to plan their transactions in the longer term at better costs.

The need to repair the gas pipeline used for import through the IP Budince is vital because of the need to prepare the GTS for the next heating season. This particular gas pipeline was a temporary  «quick and dirty» solution that was built in 2014 to ensure the possibility of the physical reverse of gas from Slovakia. The transit contract with Gazprom, which existed at that time, entirely prohibited the option of using the more powerful transit infrastructure of Uzhgorod / Velke Kapusany (with a capacity of  280 million m3 per day and the necessary reserve capacity – 4 new gas pipelines “Soyuz”, “Progress”, “UPU” and DUD-II with a diameter of 1400 mm). That is why we rarely heard about any of its maintenance in years.  Unfortunately, unlike the rest of the Ukrainian GTS pipeline, the IP Budince “Looping-4” pipeline of 1970s part does not have reserve capacity, so its repair requires a full stop or significant reduction of the transportation. It should be noted, that currently, the level of utilization of IP Uzhgorod / Velke Kapusany does not exceed 40%. It will continue to decrease, allowing the TSOs in Slovakia and Ukraine to develop options for the use of two of the four large-diameter pipes for uninterrupted and firm import to Ukraine, instead of the temporary solution of IP “Budince.”

As a responsible operator, LLC “Gas TSO of Ukraine” aims to ensure the technical safety of the infrastructure to guarantee customers the high quality of our services. We support long-term structural solutions in accordance with European network codes, which are based on a single virtual interconnection point creation and introduction of a standard capacity allocation mechanism based on the auction principle according to the Entso-g calendar, similar to how it works at all interconnection points within the EU.

Since 2014, the European Commission, together with the Energy Community Secretariat, has been actively advocating the introduction of common rules for work at IPs to create a single pan-European energy market. Janez Kopač, President of the Energy Community, has repeatedly emphasized this: “The EU and Energy Community markets must operate as one regulatory space for the benefit of system security, security of supply, market functioning and above all energy consumers.”

European codes have already been implemented on Ukraine’s borders with Poland, Hungary, Romania, and Moldova. Now there is a unique opportunity to use this approach on the Slovakia-Ukraine border as well. It is in the interests of both Ukraine and the EU.

LLC “Gas TSO of Ukraine” calls upon the Slovak side to find a solution based on European rules. Should the Slovak regulator URSO not support the idea of introducing EU network code (Commission Regulation (EU) 2017/459) and creating a single virtual point, another solution could be applied to minimize the losses of traders. LLC “Gas TSO of Ukraine” has already received the consent of the National Energy and Utilities Regulatory Commission for the special transfer of previously booked capacity from the IP Budince to the IP Velke Kapusany.

We are convinced that the market and both TSO’s will benefit from these more predictable rules based on the implementation of standard European network codes and regulations.