Preparing for another gas spat

HAVING in mind last January’s gas crisis when natural gas flowing from Ukraine was halted completely, after being a dependable source for about 40 years, Slovakia is looking more carefully at its options for the upcoming winter season when domestic gas consumption increases dramatically.

HAVING in mind last January’s gas crisis when natural gas flowing from Ukraine was halted completely, after being a dependable source for about 40 years, Slovakia is looking more carefully at its options for the upcoming winter season when domestic gas consumption increases dramatically.

Ukrainian Foreign Affairs Minister Petro Poroshenko assured his Slovak counterpart Miroslav Lajčák on December 8 that the gas crisis of last winter would not be repeated. Ukraine assured Slovakia that it has resolved all issues regarding its payments for Russian natural gas for the upcoming months, according to Peter Stano, spokesman of Slovakia’s Foreign Affairs Ministry, as cited by the SITA newswire. In return, Slovakia is expected to support Ukraine in its efforts to join the European Union. According to Lajčák, problem-free natural gas transmission across Ukraine this winter as well as the conduct and outcome of that country’s January presidential elections could significantly contribute to how Europe perceives the country in the future.

In January 2009, Russia cut off its supply of gas to Slovakia and other European countries transiting via Ukrainian pipelines as part of a price dispute with Ukraine. The Slovak government put usage restrictions in effect on January 6, requiring large commercial customers and industry to reduce their consumption to a minimum safe level; households were unaffected. The economy of gas-thirsty Slovakia started to return to its normal pulse on January 19 when the country began receiving natural gas via the Czech Republic, a route which bypassed Ukraine, allowing restrictions to subsequently be lifted.

This was the first time in Slovakia’s history that natural gas in the transmission pipeline flowed in the opposite direction, from west to east.

Companies involved in supply and distribution of natural gas in Slovakia have reiterated that they are ready for any potential crisis. These include the SPP gas utility and its 100-percent subsidiaries Eustream, the largest natural gas transporter within the EU, and SPP Distribúcia which distributes gas to end-users, and companies operating underground gas storage facilities in Slovakia.

Nafta is the key gas storage company. At present, Nafta has a storage capacity of 2.13 billion cubic metres of gas.

Pozagas company also operates one underground gas storage facility in western Slovakia with a capacity of 0.62 billion cubic metres.

Using gas from underground facilities may seem to be an easy solution for any potential gas crisis in Slovakia, but Nafta specialists warn that technical and geological restriction prevent fast withdrawal of large volumes of gas from underground facilities.

“The permeability of material inside the storage facilities and the capacity of withdrawal equipment are the main factors determining the amount of gas which can be withdrawn from storage facilities daily,” Ladislav Goryl, director of Nafta’s underground gas storage division, told The Slovak Spectator.

During the January crisis two-thirds of the natural gas consumed in Slovakia came from gas stored in Nafta’s facilities. Martin Hollý, general director of Nafta, pointed out that gas in Nafta’s storages is not owned by Nafta but by its customers. When injecting or withdrawing gas from its storages, Nafta is only fulfilling the orders of its customers in compliance with national gas dispatching, Hollý said. This makes Nafta just one link in the whole chain of companies involved in gas transmission and distribution in Slovakia.

In and outs of underground storage

All the currently constructed underground gas storage facilities are located in western Slovakia. The gas is stored in porous underground storage facilities into which it has been injected under high pressure.

Nafta stores gas in storages of depleted hydrocarbon deposits such as natural gas and crude oil which have been converted into underground storage facilities.

After the deposits are depleted and further analyses find them suitable they can be used as underground storage facilities. According to Goryl, the basic conditions for turning a depleted deposit into a gas storage facility are its permeability and its porosity. The porosity of the storage determines the amount of natural gas that it can hold while its permeability determines the rate at which natural gas flows through it. This in turn determines the rate of injection and withdrawal of gas. Other factors taken into consideration are the overall volume of such a depleted deposit as well their tightness and retention so that the stored gas does not escape.

The Nafta facilities are designed primarily for seasonal gas storage, that is, to balance the uneven consumption of gas between the summer season and winter. From May to October, gas is injected underground and during the winter season it is withdrawn.

Nafta operates a system of underground gas storage facilities in Láb and two years ago it decided to convert another depleted deposit, Gajary-Báden, into a storage facility which will extend its total storage capacity to 2.5 billion cubic metres.

“Nafta made the decision to build a new underground gas storage facility in 2007, before this year’s natural gas crisis,” said Hollý, adding that the company has been gradually increasing its storage capacity since 2003, when its capacity was 1.7 billion cubic metres. “However, the crisis has made gas storage even more crucial.”

The company’s eight-year project – with a price tag of €165 million – is divided into three phases.

The first one has already been completed and Nafta started injecting gas into one part of the facility with a capacity of 150 million cubic metres in May 2008. By 2014 all three phases should be completed and this storage facility should have a final capacity of 500 million cubic metres.

More underground storage facilities?

After the gas crisis ended, the Slovak government discussed building a state-owned underground storage facility to make a state gas reserve but later abandoned the plan as too expensive. According to Economy Minister Ľubomír Jahnátek, Slovakia has suitable geological conditions to build additional underground storage facilities with a total capacity of 7.5 billion cubic metres, SITA wrote.

There are four other new underground storage facilities in various stages of preparation in Slovakia – in Križovany nad Dudváhom, Veľké Kostoľany, Čechynce and Cífer – according to a document approved by the Slovak cabinet in early November. And during a recent visit to Russia, Prime Ministers Robert Fico and Vladimir Putin and representatives of the Gazprom company discussed the possible creation of a joint-stock gas company and construction of gas storage facilities in Slovakia.

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