Ukraine asks EC, Energy Community Secretariat for help in conflict with Slovakia's gas TSO – head of Gas TSO of Ukraine
The Slovak side takes advantage of legal inaccuracies and believes that it is not obliged to voluntarily introduce European network codes on the border with Ukraine, in connection with which the Ukrainian side appealed to the European Commission and the Energy Community Secretariat for help in resolving the situation, Head of Gas Transmission System Operator of Ukraine LLC (GTSOU) Serhiy Makogon has said.
"After Ukraine and the EU jointly implemented European legislation on the Ukraine-Russia border, the situation with manual and non-transparent distribution of capacities on the Ukraine-Slovakia border looks extremely strange," he wrote on his Facebook page.
Makogon recalled that Ukraine, for its part, in line with amendment 27 to the Ukraine-EU Association Agreement, has undertaken obligations to transpose European network codes and has already implemented them. On the part of European countries, such codes have already been introduced on the border with Poland, Hungary and Romania, he said.
The head of the GTSOU said that this serious issue with the implementation of European energy legislation on the Slovakia-Ukraine border was updated due to a technical problem – the need to repair the Looping 4-IP Budince pipeline, already scheduled by the Ukrainian operator from August 11 through October 1, although these dates are still being specified.
Makogon said that the gas pipeline at Budince was quickly built in 2014 to organize physical imports from the EU, since at that time Gazprom strongly opposed the use of the more powerful IP Uzhgorod/Velke Kapusany infrastructure for imports and was the only one guaranteed route for gas supplies to Ukraine from the EU in the amount of 27 million cubic meters per day. "Therefore, proposals to postpone the necessary repairs to next year are at least unprofessional," the head of the GTSOU said.
According to him, it is not planned to halt imports from Slovakia in connection with the repair works, but on the contrary, the Ukrainian operator is making every effort to increase and simplify the work of traders on the Ukraine-Slovakia border. Imports at the second IP Velke Kapusany are possible in the amount of up to 110 million cubic meters per day, which is 2.5 times higher than the capacity of IP Budince (42 million cubic meters per day), he said, adding that import is also possible through Poland, Hungary and Romania.
Makogon said that starting from March 1 this year, the Slovak operator could offer import capacities to Ukraine at IP Velke Kapusany in the amount of up to 110 million cubic meters per day, but offered only 10 million cubic meters per day. Now import through this IP is 6.5 million cubic meters per day, and all traders have access to import capacity of 60 million cubic meters per day.
The head of the GTSOU also said that, after identifying technical defects, the Ukrainian operator offered the Slovak operator Eustream two options for the repair period: free transfer of already booked capacities from Budince to Velke Kapusany and combining these two IPs into one virtual, as it has already been done on the border with Hungary and Poland, but it did not bring the result.
"Due to the fact that Eustream refuses to transfer previously booked capacities from Budince to Velke Kapusany on the Slovak side, traders may incur additional costs, but there will definitely be no problems with imports," Makogon said. He recalled that the National Energy and Utilities Regulatory Commission of Ukraine (NEURC) has already allowed traders to transfer previously reserved capacities on the Ukrainian side for free from Budince to Velke Kapusany.
At the same time, the GTSOU welcomes the decision of Eustream to offer additional capacities at the entrance to Ukraine at IP Velke Kapusany in the amount of 60 million cubic meters per day for the repair period. The Ukrainian operator said that at present, IP Uzhgorod/Velke Kapusany load does not exceed 40% and will continue to decrease. This enables the operators of Slovakia and Ukraine to develop options for using two of the four large diameter pipes to organize uninterrupted and guaranteed imports to Ukraine, instead of a temporary solution at IP Budince, the GTSOU said.
The operator said that the system solution in accordance with European network codes is the creation of a single virtual interconnection point and the introduction of a standard mechanism for distributing capacities on the basis of auctions according to the ENTSOG calendar, similar to the way it works at all interconnection points within the EU.
According to information from one of the market players, the main reason for the Slovak operator's refusal to switch from two existing points to a single virtual point is a reduction in tariffs and the loss of a rather substantial income, provided the supply volumes are unchanged.