Slovakia Launches Reverse Gas Supply to Ukraine

Kyiv, September 3, 2014. Yesterday Ukraine saw the first supply of European gas coming through the territory of Slovakia. The maximum volume of such reverse deliveries is estimated at 10 billion cubic meters of gas per year. The Voyany-Uzhgorod pipeline, which became operational on September 2, 2014 will allow gas transportation from the west to the east of the country. The opening ceremony of the pipeline was attended by Ukrainian and Slovak Prime Ministers Arseniy Yatseniuk and Robert Fico respectively.

It is expected that Ukraine will pay about USD 360 per thousand cubic meters for the European gas supplied through Slovakia. “We replaced 40% of gas, which we had previously bought at Russian company Gazprom to gas, which we purchase and transport from Europe, due to the opening of the reverse supply from Slovakia and opportunities for Ukraine to buy gas in Europe”, commented Ukrainian Prime Minister during the pipeline opening ceremony in the Slovak city of Velke Kapusany, as quoted by BBC Ukraine.

In August, 2014 the Slovak gas transporting company Eustream successfully tested the pipeline and its reverse delivery capacities. Starting from September, 2014 the pipeline will be able to transport up to three billion cubic meters of gas to Ukraine per year; however, by 2015 annual transportation capacities are expected to reach 10 billion cubic meters.

Notably, on April 28, 2014, Ukraine and Slovakia sealed an agreement on the reverse gas supply. It was then expected that reverse gas supplies through this route could only commence in October, 2014; however, the pipeline became operational a month earlier.

Ukrainian officials have been trying to secure European gas supplies through Slovakia for over a year amidst fear of spiking a potential conflict with Russian Gazprom. Ukrainian officials reported earlier that the Slovak corridor for reverse supply of natural gas was the most promising for the country; however, the deal was previously blocked by Russian Gazprom. Thus, in 2013 Ukraine negotiated cheaper reverse gas supplies through the European countries’ territories, such as Poland and Hungary, and is still working on reaching respective agreements with Romania.

Notably, in May, 2014, Ukraine resumed imports of natural gas through Hungary. By late May, 2014, Ukraine increased daily imports of natural gas from Hungary by over 100 times: Hungarian operator FGSZ Ltd received an application for the supply of 2.46 million cubic meters of gas.

In addition to cooperation with its Eastern European neighbors, in May, 2012, Ukraine signed a framework agreement with German electric utilities company RWE regarding gas supply. The company agreed to sell Ukraine up to five billion cubic meters of gas annually. By the end of 2012, RWE has sold Ukraine 56 million cubic meters of gas.

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