Hungary not to restart gas flows to Ukraine before filling up storages – minister
Hungary will not be able to restore reverse natural gas flows to Ukraine before it filling up its own storage units with gas, Development Minister Miklós Seszták said on Monday.
Hungary’s storages are 71.2% full at 4.5 billion cubic meters, according to Gas Infrastructure Europe’s website.
Ukraine will buy 1 billion cubic meters (bcm) of natural gas from Russia by the end of the year and up to that same amount monthly through the winter, Reuters cited Naftogaz Chief Executive Andriy Kobolyev as saying on Monday.
Kobolyev also said Ukraine would have no problems meeting pre-payment obligations to purchase Russian supplies if needed during the winter, with weather and fighting in the eastern part of the country wild cards for demand.
“We plan to buy 1 billion cubic meters of Russian gas from now until the end of the year,” he said during an energy conference in the Slovak capital.
Ukraine and Russia signed an agreement, brokered by the European Commission, at the end of October to cover gas supplies over the winter months as a temporary solution to a long-standing price dispute between Moscow and Kyiv.
But Russian gas giant Gazprom has yet to resume shipments to Kyiv, which it suspended in June, and Ukraine has yet to provide the pre-payment which Moscow says is a condition for restarting gas supplies.
Eastward gas flows from Poland and Slovakia have helped to meet demand, though Hungary in September stopped shipping supplies to Ukraine. Kobolyev said he hoped Hungary would resume deliveries as soon as December.
“We hope the supply of gas from Hungary will resume in December or January next year. We are in discussions with Hungarian counterparts,” he said.
Hungary’s National Development Minister, however, played down those hopes, saying his country would not be able to provide so-called reverse natural gas flows to Ukraine before filling up its own storages.
“We are filling up (storage) capacities and until then we are not able to provide reverse,” Reuters cited Miklós Seszták as telling reporters on the sidelines of the same energy conference.
Kobolyev has estimated the amount of extra Russian gas Ukraine might need over winter would range between zero and 5 billion cubic meters (bcm).
Ukraine’s annual gas demand has been around 50 bcm, with roughly half provided by Russia. Moscow likely delivered 5-10 bcm between January and June.
The nation’s domestic gas production is typically 25 bcm per year, although output will be lower following Moscow’s annexation of Crimea, leaving Ukraine needing 15-20 bcm from elsewhere.
Speculation in the press has been rampant over the last few weeks as to when gas flow to Ukraine may be restored. After Hungary shut down flows in September, which move triggered an international uproar, Ukraine has been bombarding with petitions to restore transmission. On 10 November, Naftogaz’s CEO said they were in constant talk with Hungarian authorities and said Budapest promised to turn the tap back on by December. A few days later Hungarian gas transmission company FGSZ Zrt. said the conditions to renew gas flows to Ukraine were still not given. It added that as soon as these conditions are met the company will make it public.
Last week Hungary’s Foreign Minister Péter Szijjártó said in Brussels that as soon as the Hungarian-Slovak gas interconnector starts commercial operation (which is due early next year), Hungary will once again have the opportunity to supply natural gas to Ukraine from non-Russian sources. Hungary used to supply the largest volume of gas to Ukraine but the government must also take care of refilling Hungarian storage facilities, the minister added.
Slovak gas pipeline operator Eustream has said today it is ready to begin testing a new Slovakia-Hungary link.
The two countries’ pipeline operators announced this month the start of the open season for capacity on the interconnector, with bids due on 15 December. The gas link should start full operations on 1 January next year.
Now there’s more static around the issue thanks to Seszták, as we do not know what fill-up ratio the Hungarian government is going for with the gas storage units. The current level is already among the highest in Europe compared to national consumption, and it appears to be unrealistic that when cold weather hits additional significant volumes are pumped into the storages.
From Ukraine’s perspective it could be really irksome that the Hungarian cabinet apparently does not even have a clear target date for the restart of gas flows to Ukraine.