Ukraine, Poland Canvas Interest in New Capacity
Ukraine and Poland's gas grid operators (TSOs) have launched a non-binding consultation to assess likely demand for additional cross-border transmission capacity.
Poland's state-run Gaz-System and Ukraine's Ukrtransgaz, a subsidiary of state Naftogaz, aim to estimate the level of market participants’ demand for the capacity at their border in order to "create the basis for further enhancement of the integrity of the regional markets through expansion of the Polish and Ukrainian gas transmission networks," said Gaz-System April 6.
Both estimate that firm capacity could be available to the market from 1 January 2020, it added, and that therefore this 'non-binding market screening procedure' for the capacity at the Polish-Ukrainian border would cover the period of 15 years starting from gas year 2019-2020, taking into account that the capacity in gas year 2019-2020 will be available from January 1 2020 until October 1 2020.
The results of this screening procedure will form the basis for the TSOs' decision on a future binding Open Season regarding firm capacities at the Poland-Ukraine border in both flow directions, which in turn would be the basis for deciding on their investment in any new interconnection, said both TSOs.
Ukrtransgaz vice-president Pawel Stanczak said April 6 that, after the expiration of the gas transit contract between Naftogaz and Gazprom at the end of 2019, both TSOs are going to implement EU rules on all interconnectors and establish a single virtual interconnection point, which would combine capacities of the existing physical interconnection points.
“The market assessment may result in a further enhancement of the integrity of the regional markets through expansion of the Polish and Ukrainian gas transmission networks,” said Stanczak: "The new interconnector would provide Ukraine firm access to the Polish LNG terminal, and at the same time Polish traders would get firm access to the huge Ukrainian gas storage [facilitie]s, as well as firm connections to other countries via Ukraine's gas transmission system.”
Gaz System adds: "Enhancement of the bi-directional gas flows between Poland and Ukraine would significantly contribute to the implementation of the European Union’s strategic aims of improving energy security and market integration." If the market interest during the binding phase is confirmed, the final decision on expansion of the bidirectional gas flows between Poland and Ukraine may be taken. Interested shippers are asked to contact both TSOs by April 30. Both pledge to publish the results of the assessment by May 30 2018.
In February 2018, the Ukrainian government said it had begun talks with a number of western European TSOs interested in taking on the management of Ukrtransgaz's gas transmission system.