Gas TSO of Ukraine (GTSOU) and FGSZ, the operator of the Hungarian gas transmission system, sign an interconnection agreement to introduce firm capacity in the direction “Hungary-Ukraine” from January 1, 2022.
The introduction of firm import capacity from Hungary contributes to the diversification of gas supply sources and strengthening of the energy security of Ukraine. Therefore, Ukraine increases its firm import capacity by almost 30% and receives access to new sources of natural gas supply, namely to the LNG terminal on the island of Krk (Croatia).
This agreement will allow the customers to physically transport up to 8 mcm of natural gas per day from Hungary to Ukraine. Together with the existing 27 mcm of daily capacity from Slovakia, this will increase the total amount of firm gas import capacity to 35 mcm per day.
GTSOU CEO Sergiy Makogon commented: “For the first time since 2014, Ukraine has increased its firm gas import capacity from Europe. It is important that a new contract is signed with Hungary, from which Ukraine has transported 90% of all the import gas this year by virtual reverse. This demonstrates market demand for the HU-UA gas transportation route and advantages for both countries. For the first three months of 2022, we will work in the testing mode: we will coordinate and adjust processes with the Hungarian operator FGSZ to ensure reliable transportation of natural gas to Ukraine. The first daily auction will be held on December,31, 2021. Together with Ukrainian diplomats, Ministry of energy, Ministry of foreign affairs, Regulator we continue working on the further increasing of firm capacity on the other routes (Slovakia, Poland)”.
Customers will be able to book import capacity from Hungary at daily auctions on the RBP auction platform starting from January 2022. The auction for the allocation of monthly capacity for February 2022 will take place on January 17, 2022.
Ukrainian and Hungarian operators need a three-month testing regime to coordinate and adjust all technical and operational processes to ensure the physical transportation of natural gas in the direction of Hungary – Ukraine. First of all this concerns the technical aspects of gas quality and providing the necessary gas pressure in order to extend the agreement and further increase the guaranteed capacity.
Ukraine’s total gas import capacity from the EU amounts to 287.2 mcm of gas per day, of these 252.2 mcm are interruptible** capacity.
*Firm capacity gives the right to use a certain volume on a guaranteed (permanent) basis.
**Interruptible capacity allows the use of a certain volume if it is technically possible, but the gas transmission system operator has the right to interrupt the service at any time (subject to the minimum time for interruption reporting) if the transportation is technically impossible. Minimum interruption lead time for any hour of the gas day is 45 minutes after the start of renomination cycle for this hour of the gas day.