Gas still flowing to Slovakia, for now

AFTER a bad experience in January 2009 when its natural gas supplies were cut off for about two weeks, Slovakia is looking towards the east with renewed fear now that Russia has halted gas supplies to Ukraine. While the country is able to cope with a short-term halt in gas supplies thanks in part to gas reserves stored underground in the west, the fact that Ukraine is not filling its underground gas storage facilities could result in significant problems with gas supplies to Slovakia and other European countries during the winter.

SPP and Eustream have not registered any changes in supplies of Russian gas via Ukraine to Slovakia.SPP and Eustream have not registered any changes in supplies of Russian gas via Ukraine to Slovakia.(Source: SME)

AFTER a bad experience in January 2009 when its natural gas supplies were cut off for about two weeks, Slovakia is looking towards the east with renewed fear now that Russia has halted gas supplies to Ukraine. While the country is able to cope with a short-term halt in gas supplies thanks in part to gas reserves stored underground in the west, the fact that Ukraine is not filling its underground gas storage facilities could result in significant problems with gas supplies to Slovakia and other European countries during the winter.

Russia cut off gas to Ukraine on June 16, demanding upfront payments for future supplies, though gas transit to Europe should continue without any reductions. So far, the main gas companies in Slovakia, the gas utility SPP and the gas transporter Eustream, have not registered any changes in supplies of Russian gas via Ukraine to Slovakia.

“If the halt in supplies is only temporary, in the horizon of several weeks, then neither Slovakia nor other clients in the EU should feel it significantly,” Karel Hirman, the director of the Energy Policy Section at the Slovak Innovation and Energy Agency (SIEA), told The Slovak Spectator.

SPP has assured that as the key gas supplier in Slovakia, it has several tools to secure the country with a steady supply of natural gas in the event of a reduction of gas supplies from Russia through Ukraine. Its spokesperson, Peter Bednár, specified in the company’s press release on June 16 that SPP has at its disposal a sufficient amount of gas in underground storage facilities in Slovakia, which, due to the warm winter last year, currently contain more gas than usual. SPP can also buy gas on spot markets and send it to Slovakia via reverse flows. The gas supplier can also use the diversification agreement signed after the gas crisis in 2009 to direct gas to Slovakia with the reverse flow via the Czech Republic.

Slovak Economy Minister Tomáš Malatinský convened a crisis staff meeting regarding gas supplies and energy security on June 16. The meeting was attended by representatives of gas companies Eustream and the distribution arm of SPP and the SPP parent company, and the gas storage company Nafta.

“I was informed about the situation with gas shipments and I can assure everyone that the suspension of gas supplies to Ukraine is not influencing the supply of gas to Slovakia,” Malatinský said following the meeting, as quoted by the SITA newswire. “Representatives of all the companies informed me of their readiness should shipments be completely stopped.”

Eustream is prepared, according to its spokesman, for complete cessation of gas supplies to Slovakia from Ukraine. It will rely on reverse flows from Austria in the volume of 23.8 million cubic metres of gas per day and the Czech Republic in the amount of 67 million cubic metres per day, both declared technical maximum volumes. If necessary, according to him, the use of the newly built Slovakia-Hungary interconnector is also conceivable, SITA wrote.

Hirman warns that if Russia continues to halt gas supplies to Ukraine, Slovakia and other gas consumers in Europe may encounter problems in the winter.

“If an agreement is not achieved by the end of July, then I am afraid that the mutual distrust and tensions would increase to such an unbearable extent that compromise will be impossible,” said Hirman. “It is also necessary to add to this the factor of underground gas storage facilities in western Ukraine, without which a smooth operation of gas transit during the winter is technically impossible.”

Hirman specified that currently the Ukrainian gas storage facilities are at roughly 40 percent of the needed capacity, which is approximately 13.5 billion cubic metres of gas. If they are not filled during the summer, it would not be possible to compensate for this lost time in late summer or in autumn, and the insufficient amount of gas in the underground facilities would lead to significant and unsolvable technical problems with the transit of gas via Ukraine, especially if the next winter is stronger, not only in the EU, but also in Ukraine and Russia.

The gas pipeline in Russia and Ukraine was built in the era of the Soviet Union as a unified system, Hirman explained. Moreover, the transit system in Ukraine is not separated from the domestic distribution system. This is why, also due to the extremely long transit route from western Siberian gas deposits, the underground storage facilities are an inseparable part of the transit system in Ukraine, which is a unique configuration in the world.

“Because of this, during the winter period, when supplies for Ukraine are throttled down, automatically it is not technically possible to keep gas transit in full operation,” said Hirman. “Now, during the summer, when the consumption in Ukraine is minimal, thanks to local [gas] production in Ukraine as well as thanks to reverse gas supplies from the EU to Ukraine, it is possible to keep the transit in a smooth regime. But there is the problem with filling the storage facilities for the winter, thus the problem is only being put off.”

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