Eastring: Diversifying Eustream's portfolio
Late last year, in November, Slovak TSO Eustream proposed the "Eastring" natural gas infrastructure project as an alternative to the South Stream pipeline project, which was officially scrapped last December. As told to Natural Gas Europe earlier this year, Eastring's objectives include providing gas supply alternatives for Balkan countries like Romania, Moldova and Bulgaria, would be linked to all natural gas sources, be compliant with EU law, facilitate access to new gas sources, and be the most efficient in terms of time and cost (the total cost of Eastring is EUR 1.8 billion (to Isaccea) to EUR 2.2 billion (to Malkoclar), with a length of 832 km to 1,015 km for bi-directional, 20 Bcm/year capacity), given its plan of refurbishing existing natural gas infrastructure.
To get an update on the project, Natural Gas Europe spoke with Eustream's staff at the World Gas Conference in Paris, France.
Natural Gas Europe: When we're considering the Slovak natural gas market and those of other countries in Central and Southeastern Europe, what would you tell those who are not familiar with their infrastructure and sources of gas?
Eustream: Our basic mission is to transport natural gas in Slovakia and through Slovakia to the European markets. To this end, we operate a large-scale high-pressure gas transmission system in the territory of the Slovak Republic. This transmission system represents an important energy link between the Commonwealth of Independent States (CIS) and the European Union. In other words, we are the main entry gate and the biggest highway for Russian gas in the EU. The business name "Eustream" is intended to reflect this specific role we have.
Could you refresh our memories on how Slovakia was affected by the gas cut-off of 2009? How much was it affected?
It was really affected. All such projects have been started as reverse flows, because Slovakia had never been through such a situation, and that's why all these projects for reverse flow and security of supply, as well as the role of storages, come into play. The gas industry has come a long way since that time.
Why has Eustream decided to enter the realm of international pipeline connections, i.e. Eastring?
Eustream is a part of international pipeline connections for more than 40 years. Slovak Gas TSO in connected with Austrian, Czech, Ukrainian and Hungarian transmission systems and we are preparing connection to polish pipelines. As strategic gas carrier we fill liability for ensuring energy security of the European region. On the other hand use of our system had been dropping step-by-step so we were looking for new business opportunities and utilization of our system. The Eastring project would connect western liquid markets to southeast Europe and Turkey.
After cancelation of the South Stream project, Eastring is very important element in process of diversification of natural gas sources and transmission routes, namely for the countries of the Balkan region. This would be possible by connection of these countries to the developed gas market places in Western Europe. Another very important aspect of the project is its ability to connect countries in the Central and Eastern Europe to the gas from the LNG terminals in Greece and Turkey, which would be possible via intended Bulgarian projects of connections to both mentioned countries. Intended connection between Bulgaria and Turkey allows also to consider Eastring pipeline from the another perspective – as a project able to connect Europe to the alternative gas sources from the Caspian region, e.g. Azerbaijan, Turkmenistan and Iran. From the perspective of the all mentioned aspects, Eastring project perfectly fits into the strategy of development of Bulgarian gas infrastructure.
What qualities or assets does Eustream have that make it well suited to pursue this activity?
For more than 40 years, we've been involved in the effective transmission of Russian gas through our territory. We've got good technicians, technical experts who have a wealth of experience. One of the Eustream´s main contribution will be also the biggest Compressor Station of EU, situated in the east of Slovakia, in Veľké Kapušany.
What are your thoughts about refurbishing existing pipelines versus constructing new natural gas transport infrastructure?
Compared to other projects, Eastring is the best alternative from economic and time point of view. It should be an alternative to use an already existing network and pipeline. Our colleagues have recognized the possibility that this is a feasible project among these kinds of projects, and that's a view that I share.
What geopolitical arguments are you using to further the Eastring project in terms of diversification of sources and/or routes of gas?
Eustream is very important project also from geopolitical point of view, because it will resolve Central European region´s security issues as well as help to Balkan countries and support trade in western hubs.
Discussions with our potential project partners, mainly from Hungary, Romania and Bulgaria continue and had resulted into successful submission of the project to the reopened Ten Year Network Development Plan ("TYNDP") and to the list of candidates for the PCI list (Projects of Common Interest), which would enable Eastring project to be eligible for the financial support from the Connect European Facility fund ("CEF").
Recently some sort of agreement has been signed regarding Eastring. What can you tell us about that?
Slovakia, Hungary, Romania and Bulgaria signed a Joint Declaration in May in Riga. We consider conclusion of mentioned document on further gas infrastructure development in these countries as a very important milestone for the region. Nevertheless, despite the fact we perceive conclusion of this Declaration in a very positive way, this agreement is not concrete on further steps and timeline of the Eastring project implementation. This is a task to be solved on the commercial/company level and due to this fact we are progressing with conclusion of the Declaration/s to be signed on the companies level.
What are the next steps for the Eastring project? Will you continue to advocate for it, or what's going to happen next?
Eustream will continue to promote the project and cooperate with TSOs from Romania, Bulgaria and others, and also have a discussion with potential partners and shareholders, also from Western Europe.
Activities leading into successful submission of the project to the PCI list, in order to become eligible for grants are our main target for the upcoming weeks.
Such activities cover also works on detailed project routing and calculation of precise costs of the project. After successful submission of the project to the PCI list, we will be able to proceed with further steps, covering also performance of the market screening.
-Drew Leifheit