Ukrainian and Hungarian transmission system operators increase technical capacity of gas transportation from Hungary to Ukraine by 14%

May 29, 2019, Kyiv – Following preparatory steps, Ukrtransgaz and FGSZ have increased the technical capacity of natural gas transportation from Hungary to Ukraine by 14%.

The relevant agreements have been signed between Ukrtransgaz JSC and FGSZ LTD, and will come into force on 30 May 2019. In line with these changes, the total capacity at the point of GMS “Beregadorets” will increase from 17.1 to 19.5 mln cubic meters per day.

The new agreements enable a significant increase of the gas import capacity from Hungary to Ukraine.  This development is particularly important in light of the preparations for the winter season 2020. Since the transit contract between Naftogaz and Gazprom expires in the end of 2019 and no new contracts have been signed yet, Ukraine prepares for a 0-transit scenario starting from the beginning of 2020. To mitigate supply risks, Ukraine aims to accumulate 20 bln cubic meters of gas in its underground storages by the beginning of the next heating season. This represents a 3 bln cubic meters increase compared to the start of the preceding heating season.

The Hungarian import direction has gained in popularity in recent years among Ukrtransgaz customers. In 2016, about 1 billion cubic meters of natural gas was imported from Hungary to Ukraine. In 2017 this figure rose to 2.8 bln cubic meters, and in 2018 it reached 3.4 bln cubic meters. Since the beginning of 2019, there has been additional year-on-year growth of 66% to 0.92 bln cubic meters.

With tariffs for the exit points of the Hungarian gas transmission system from April to September at the competitive to European ones level, there is a strong possibility that the current growth trend will continue over the coming months.

At present, Ukraine has 11.1 bln cubic meters of gas in storage, representing an increase of more than 1.7 bln cubic meters on the amount injected at the same point in 2018. Since the beginning of May, 1.6 bln cubic meters of gas have been injected into the underground storages, with the average daily injection rate of 60 mln cubic meters.