Ukraine signs gas deal with Hungary

Ukraine signs gas deal with Hungary

Gas TSO of Ukraine and FGSZ, Hungary’s gas transmission system operator, have concluded an agreement for the supply of a guaranteed volume of natural gas from Hungary to Ukraine starting January 1, 2022.

That’s according to Sergiy Makogon, CEO Gas TSO of Ukraine, LLC, Ukrinform reported referring to his post on Facebook.

"I have good news on Energy Day and Diplomat Day – for the first time since 2014, Ukraine is increasing its guaranteed capacity for importing gas from Europe. Gas TSO of Ukraine and Hungary’s GTS operator, FGSZ, have signed an agreement on cooperation in the introduction from January 1, 2022, of guaranteed capacities for natural gas shipments in the Hungary-Ukraine direction," Makogon wrote.

According to the official, the most important thing for him personally in the deal is to create opportunities for domestic traders to gain access to gas from an LNG terminal on the island of Krk (Croatia) and, accordingly, to diversify sources of gas supply to Ukraine. According to Makogon, this is an important step toward strengthening security and new opportunities for traders from Ukraine and Europe.

“Immediately after unbundling was completed in 2020, our company started working on a number of issues with our international colleagues. This is a long process of negotiations and approvals (that is still ongoing), and I’d like to thank the Gas TSO of Ukraine’s team and all contributors for their first results," Makogon added.

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According to the company CEO, the agreement will allow physically shipping from Hungary to Ukraine up to 8 million cubic meters of gas per day.

"This is the daily volume of gas consumption in Kyiv, the largest gas consumer. Together with the available daily capacity from Slovakia (27 million cubic meters), the total guaranteed capacity for gas imports to Ukraine will increase to 35 million cubic meters per day. So far, the agreement is concluded for three months as a test. Throughout this time, we plan to agree with our Hungarian counterparts and adjust all technical and operational processes in order to extend its operation from April 2022 on and further increase the guaranteed capacity in this area," the CEO added.

From December 31, it will be possible to reserve capacity for gas imports from Hungary through the RBP platform at daily auctions. The first monthly auction will take place on January 17.

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"We are very pleased to have created this new opportunity for the market. Dozens of difficult negotiations were not in vain. I’d like to especially thank the National Energy and Utilities Regulation Commission, which was helping us convince our Hungarian counterparts," Makogon stressed.

As Ukrinform reported earlier, on December 15, Makogon stated that Gas TSO of Ukraine did not invest in modernizing compressor stations and gas pipelines that would not be used in the lack of gas transit as a result of the Nord Stream 2 commissioning.


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