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Eustream: an uncertain future

Russian gas has been unreliable in the past; on the other hand, Russian gas should flow through Poland and Ukraine, and not go through the second, planned Nord Stream line, delegates were told at the Central European Day of Energy in Brussels.

Eustream: an uncertain future


Russian gas has been unreliable in the past; on the other hand, Russian gas should flow through Poland and Ukraine, and not go through the second, planned Nord Stream line, delegates were told at the Central European Day of Energy in Brussels December 9, 2016.

The good relationship between Russia and Germany – as exemplified by the recent decision by the German network regulator to allow Gazprom to use more of the Opal line – is threatening gas market competition as well as the finances of the gas transport businesses of countries between the 2 states, speakers from transmission system operators from central Europe said.

Both Poland and Ukraine have a sizeable domestic production of 5bn m³/yr and 20bn m³/yr respectively and used to rely almost entirely on Russian gas for the remainder.

However, Poland has built an LNG import terminal, which was commissioned over the summer to bring Qatari gas; and it is examining the possibility of a gasline bringing Norwegian gas through Denmark to Poland, with capacity of 10bn m³/yr. Poland is a gas producer in Norway and the gas is delivered now to Germany.

The CEO of Polish grid operator Gaz-System Tomasz Stepien said that the project was serious, and the transit cost would be competitive. Poland would need no Russian gas if the latter were also built.

And Ukraine has managed to meet its gas demand using gas delivered by pipeline from its western neighbours, taking no Russian gas for the last year.

The reliability of Russian gas was also questioned: a spat with Ukraine led to flows being cut off, leading to freezing conditions in Slovakia and Bulgaria in early January 2009.

This was attributed at the conference to an attempt by Russia to interfere in the internal politics of Ukraine.

But speakers at the conference urged the continued use of their gas transit systems by Russian gas in the interests of market competition.

There is no cost-effective alternative for many consumers, they said. There is also a revenue angle, with the Slovak system Eustream, the EU's largest, bringing in €700mn/yr.

If built, Nord Stream 2 and the related bidirectional Austria-Czech interconnector (Baci) would leave the 80bn m³/yr system shipping just 6-7bn m³/yr for Slovak consumers.

Gazprom's ship-or-pay contract covers 50bn m³/yr until 2028.


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