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Reverse gas flow launched

WITH the winter approaching and Russia and Ukraine having yet to agree over the resumption of natural gas supplies, the reverse flow pipeline from Slovakia to Ukraine has been officially launched. High Representative of the European Union Klaus-Dieter Borchardt together with Slovak Prime Minister Robert Fico and Ukrainian PM Arseniy Yatsenyuk ceremonially turned on the valve of the Vojany-Uzhgorod pipeline on September 2.“The introduction of the reverse gas flow from Vojany to Uzhgorod is an important event both in Slovak-Ukrainian relations and in the European context,” said Fico, as cited by the TASR newswire. “The solution of the reserve flow was the best possible solution from the technical, time, as well as legal point of view.”Fico added that the reverse gas flow will only be possible if the supplies for Slovak consumers are not endangered. He stressed that the reverse pipeline will contribute to increasing the energy security of Ukraine.“Slovakia, as a country almost 100 percent dependant on the import of energy sources, understands themes like energy security or diversification of energy supplies,” said Fico.

WITH the winter approaching and Russia and Ukraine having yet to agree over the resumption of natural gas supplies, the reverse flow pipeline from Slovakia to Ukraine has been officially launched. High Representative of the European Union Klaus-Dieter Borchardt together with Slovak Prime Minister Robert Fico and Ukrainian PM Arseniy Yatsenyuk ceremonially turned on the valve of the Vojany-Uzhgorod pipeline on September 2.
“The introduction of the reverse gas flow from Vojany to Uzhgorod is an important event both in Slovak-Ukrainian relations and in the European context,” said Fico, as cited by the TASR newswire. “The solution of the reserve flow was the best possible solution from the technical, time, as well as legal point of view.”
Fico added that the reverse gas flow will only be possible if the supplies for Slovak consumers are not endangered. He stressed that the reverse pipeline will contribute to increasing the energy security of Ukraine.
“Slovakia, as a country almost 100 percent dependant on the import of energy sources, understands themes like energy security or diversification of energy supplies,” said Fico.

According to Yatsenyuk, the reverse flow gas pipelines from Slovakia, Hungary and Poland will eventually be able to cover 20 percent of Ukrainian consumption.

“Diversification of energy supplies and energy security are problems which are of vital importance for Ukraine,” said Yatsenyuk, adding that his country needs unity and a common course in politics, as well as in the economy. “Europe needs new energy rules that would be honest in the first place, and wouldn’t allow any non-EU country to act as a monopoly.”

According to Borchardt, this is a special day for Ukraine, as it has taken an important step towards energy security, and also for Slovakia and Eustream and the whole of the EU – which have expressed solidarity with those who need it.

“It is a great day, the first step to reducing Ukraine’s dependence on Russian gas supplies,” said Borchardt, as cited by the SITA newswire. “Today, Europe’s gas highway has become a two-direction route. Today is a good day for Ukraine and the European Union as well. We are interested in building a large reverse [flow capacity].”

Yatsenyuk also said that the opening of the Vojany-Uzhgorod pipeline is not the optimal solution and that it is necessary to work on the large reserve flow. He referred to a gas reserve flow solution preferred by Ukraine, which is a reverse of the gas flow via the main pipe operated by Slovak gas pipeline operator Eustream and used to transport Russian natural gas westwards via Slovakia. As new gas pipelines bypassing Ukraine have been built, its capacity is not fully utilised. Slovakia, however, declined this option, citing concerns that it would violate existing contracts with Gazprom and proposed instead to renovate a smaller, unused, lower capacity pipeline from the eastern Slovak town of Vojany to Uzhgorod in Ukraine.

Ukrainian natural gas consumption is estimated at about 50 billion cubic metres per year. The country covers one half of its consumption from its domestic gas production, but it needs to import the rest from abroad.

The Vojany-Uzhgorod pipeline will transport gas to Ukraine at a rate of 10 billion cubic metres of natural gas per year from the beginning of September. However, it will not be capable of pumping at that speed consistently and, thus, the actual volume delivered will be less. Starting on March 1, 2015, it will be capable of maintaining that delivery speed on a permanent basis.

The guaranteed rate of delivery starting on October 1 will be at a rate equivalent to 6.4 billion cubic metres per year, Eustream spokesman Vahram Chuguryan wrote in a press release.

Eustream estimated the costs of conducting the reverse flow via the Vojany-Uzhgorod pipeline at €20 million. In the end the costs were lower, though they did not provide exact numbers.

The reverse flow was enabled by a memorandum on introducing the reverse gas flow from Slovakia to Ukraine signed by the gas transport operators of the two countries, Eustream and Ukrtransgaz, back on April 28. Ukraine launched talks with its EU neighbours after Russia’s state-owned Gazprom almost doubled the gas prices for Ukraine in early April.

The full capacity of the Vojany-Uzhgorod pipeline was booked by Eustream’s customers until the end of 2019.

Tomáš Mareček, CEO of Eustream, specified for the Sme daily that the capacity of the Slovak-Ukrainian reverse flow has the biggest potential capacity of the three reverse flow pipes to Ukraine. While the daily capacity of the Polish-Ukrainian reverse flow is 4 million cubic metres, the capacity of the Hungarian-Ukrainan reverse flow is about 6 million. The daily capacity of Slovakia’s pipeline is 27 million.

While several companies showed interest in supplies of natural gas to Ukraine during Eustream’s Open Season, interest was officially confirmed by German RWE and French Gaz de France. Eustream and the pipeline are the delivery mechanism and the actual sale of gas is conducted by the suppliers and Ukraine. Such agreements are dependent on the Ukrainian side’s ability to pay, something that has been among the major sticking points in the stalemate with Gazprom. The Ukrainian national energy company Naftogaz has purchased a major portion of the exit capacity of the Vojany-Uzhgorod line from Eustream.

“Naftogaz has purchased a major portion of the capacity of the newly created route until 2019,” Naftogaz announced in early July.

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