Ukraine and Hungary link pipelines to bypass Gazprom

The operators of the gas transportation systems (GTSs) of Ukraine and Hungary signed an agreement on May 29 on a cross-border merger of gas pipelines that would exclude Russia’s Gazprom from the current gas supply scheme between Ukraine and the European Union, according to the press service of Naftogaz Ukrainy.

!!!!!!!!!!!!!!!! UAA1 !!!!!!!!!!!!!!!

"The agreement applies to all pipelines crossing the Ukrainian-Hungarian border, and is fully consistent with EU energy legislation. It is the first such agreement between Ukrtransgaz and the operator of gas transportation system of the neighboring country of the European Union," the Ukrainian company said.

"At present, Ukrtransgaz cannot fully cooperate with the operators of neighboring GTS of EU member states due to the current scheme of their interaction with OAO Gazprom. This scheme was created in Soviet times and does not correspond to the current legislation of the Energy Community, of which Ukraine is a member," the company further reported.

As noted by Naftogaz, an interconnector agreement is the only legal basis for operational cooperation between GTS operators of adjacent countries who are members of the Energy Community.

"On the basis of such agreements, an exchange of information is carried out regarding gas flows, their directions, volume, timing, customers, recipients and so on. Without such agreements the sharing of relevant information is not carried out" according to Naftogaz.

The company further reported that Gazprom does not provide the Ukrainian side with the so-called shipper code pairs - information about certain batches of gas that it transports through the territory of Ukraine. The information on gas volumes at gas metering stations on the western border of Ukraine is transmitted to a gas transportation company, Gazprom Expor, which is a Gazprom subsidiary. After that, as noted by Naftogaz, Gazprom transmits gas to neighboring GTS operators, providing them with shipper code pairs.

"Thus, Gazprom assumed a number of important functions of a GTS operator, which violates European energy legislation, because it creates limitations for full cooperation between operators of the neighboring countries in the territory of the Energy Community," Naftogaz said.

It also is reported that preparations are made to sign similar agreements with Slovak, Polish and Romanian operators.

The next step for ensuring full cooperation between Ukrainian operators and those of the EU consists of obtaining information from Russian Gazprom and making relevant changes to the Ukrainian legislation.

"We hope that Gazprom will meet the requirements of European legislation and provide this information. If it does not, we are considering filing a formal complaint with the European Commission's Directorate-General for Competition, which is already conducting an antitrust investigation into the actions of Gazprom," the press service reports,  quoting Naftogaz head Andriy Kobolev.

!!!!!!!!!!!!!!!!!!!!!!!! UAA2 !!!!!!!!!!!!!!!!!!!!!