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In case Russia stops the transit, Ukrainian storages are in place to help Hungary pass next winter

March 25, 2019, KyivUkrtransgaz offers European gas suppliers to use the free capacities of Ukrainian storages in order to create the necessary additional gas reserves in order to guarantee uninterrupted gas supply to Hungarian consumers, as well as to avoid potential threats to the energy security of the EU countries during the autumn-winter period 2019-2020.

 

Each year, Hungary consumes more than 10 billion cubic meters of natural gas. Currently such need is covered for more than two thirds by Russian gas entering Hungary through the Ukrainian GTS (IP Beregovo), for about 20% - by domestic production, while the remaining volumes are imported from Austria. Underground storages with total capacity of up to 6 billion cubic meters are covering the peak consumption of Hungarian consumers. It should be noted that about 60% of Russian gas entering the Austrian gas hub in Baumgarten is also transported through the Ukrainian GTS (IP Uzhgorod).

 

Taking into account the abovementioned, Ukrainian underground storage facilities can help Hungary provide uninterrupted gas supplies to its domestic consumers next winter, even if Russia stops the transit of gas through Ukraine to the EU countries from 01.01.2020.

 

Currently Ukraine can offer European customers about 12 billion cubic meters of storage. Withdrawal capacity reaches 260 million cubic meters per day, and the capacity of gas exports to Hungary is about 68 million cubic meters per day, which is 4 times more than the capacity of exports from Austria to Hungary (only 15 million cubic meters per day). Using such significant technical capacities of Ukrainian GTS can significantly reduce the risk of an emergency in Hungary.

 

Ukraine can offer similar services and capacities to suppliers from other countries of Central and Eastern Europe.

 

Background information

 

Underground storage facilities complex of Ukraine is the largest in Europe. It consists of 11 underground gas storages with a total capacity of 31 billion cubic meters. During the last 10 years, Ukraine has used only 50-60% of its technical capacity to meet its own needs. The 5 most powerful Ukrainian storage facilities are located in the western part of Ukraine, only 160 km from the border with Hungary.

 

On January 1, 2020, a 10-year transit contract between NJSC “Naftogaz of Ukraine” and Russian Gazprom expires. Earlier, the Stockholm Arbitration ordered Gazprom to reimburse Naftogaz $ 4.6 billion for violating the terms of this contract and the contract for gas supplies to Ukraine. Gazprom is currently not actively negotiating a new long-term gas transit agreement via Ukrainian GTS and is actively promoting the construction of offshore gas pipelines (North Stream 2, Turkish Stream) together with their land sections.

 


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