A Hungarian RBP auction has been held for supplies via the Vertical Gas Corridor (Trans-Balkan gas pipeline operating in reverse mode) to Ukraine for September. Five operators offered deliveries of 3.1 million cubic meters per day from Greece via Bulgaria, Romania and Moldova to Ukraine. However, no buyers were found. And, to all appearances, the route will remain empty. About it reported the former head of the Ukrainian GTS Operator, Serhiy Makogon, said this on his social media page.
According to Makogon, the lack of interest in the mentioned route is explained by high competition from other routes, unfavorable transportation conditions, as well as traders’ expectations for the launch of a new product – Route 2, which will connect the LNG terminal in Alexandroupoli (Greece) with Ukraine via Bulgaria, Romania and Moldova.
“The problem is its (the route’s) cost and the complexity of booking and working with each operator. Until operators make prices attractive to traders, then it will stand empty,” he wrote in a comment to his publication.
In particular, according to Makogon, the main problem is the Romanian and Moldovan operators, who have set a high tariff for transportation.
“And the main problem is Romania, which has set the highest tariff, although they do not even have a compressor station there. And Moldova has also set a high tariff. When Romania and Moldova reduce the tariff, the demand will appear,” he believes.
As a result, the first auction held on May 29 to book capacities for gas transportation from Greece to Ukraine along the Trans-Balkan route for June in the amount of 2.9m cu.m./day ended without a single bid from participants.
Also, the RBP auction was canceled for June, and only symbolic volumes were booked for July and August. For example, in August, just over 400,000 cubic meters per day flowed from Romania to Ukraine via Moldova, while the reverse capacity was 11.3 million cubic meters.
To somehow solve this problem, the operators of gas transportation systems Bulgarian Bulgartransgaz EAD, Greek DESFA SA, Romanian Transgaz SA and Moldovan VestMoldTransgaz SRL together with Ukrainian OGTSU agreed on a single tariff for gas transit with a 25% discount to increase the attractiveness of the route. For the Ukrainian operator the discount is 46%. (The proposed transportation package can only be used for gas supplies to Ukraine).
So far, it has not helped.
At the same time, there is interest in this route, and a lot of it. On August 26, Bulgartransgaz completed auctions for booking capacity at interstate points for the next gas year, which begins on October 1. The total amount of the reservation amounted to more than 70 million euros.
“Twenty-one Bulgarian and international companies participated in the auction. The point of greatest interest is Kardam-Negru Voda to Romania (the entry point of the Trans-Balkan gas pipeline),” Bulgartransgaz said.
Vladimir Malinov, executive director of Bulgaria’s GTS operator, said that the growing interest in gas transportation from Bulgaria to Romania is a sign of the continuing need for transit of significant volumes from south to north.
“The results of the procedure once again substantiate the need to implement the Vertical Gas Corridor. The strategic project will enable the transportation of additional volumes of natural gas from reliable sources through the gas transportation systems of Greece, Bulgaria, Romania, Hungary, Ukraine, Moldova and Slovakia. The expansion of the existing networks will ensure security and diversification of gas supplies to Central and Eastern European countries,” Malinov said.
Perhaps, further reduction of appetites of transportation companies will allow to establish this route after all.
