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    Ukraine Expands Gas Link with Poland

Summary

Ukraine could import even more gas from Poland, were it not for a bottleneck on the Polish side that will not be eased until 2021.

by: Joseph Murphy

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Ukraine Expands Gas Link with Poland

Ukrainian state gas grid operator Ukrtransgaz has wrapped up work modernising the Komarno compressor station in the western Lviv region, enabling Ukraine to tap extra gas from Poland.

The upgrade project means the Ukraine-Poland gas interconnector is now capable of flowing 6.6bn m³/yr to Ukraine, Ukrtransgaz’s parent group Naftogaz said on October 16. Flow tests are scheduled for late October. The link can also pump up to around 5.5bn m3/yr to Poland.

The project’s completion comes as talks drag on between Russia and Ukraine on establishing terms for Russian gas transit next year. Moscow has suggested extending the existing transit contract due to expire at the end of this year, while Kiev wants a new deal aligned with EU energy legislation.

Ukraine has been importing gas from Poland since 2014, helping it to go without purchases from Russia. The bulk of the gas Ukraine is receiving still originates in Siberia, however, and has been resold by Poland.

Poland’s launch of the 5bn m3/yr Swinoujscie LNG terminal in 2015 opened up a new source of gas for Ukraine. In August, the two countries signed a memorandum with US, with supplies gas to Swinoujscie, on increased co-operation in regional energy security. Naftogaz said in its statement that the modernisation of the gas pipeline from Poland fulfilled its responsibilities under the agreement.

Ukraine is now able to receive more gas than the Swinousjscie terminal has the capacity to import, Naftogaz said. The facility is set to be expanded by 50% by 2021, but the Ukrainian firm also said gas flows from Poland were impeded by a bottleneck on the Polish side of the border, which will not be removed until a new pipeline is added in 2021.

Removing this restriction would also help European traders make use of the 10bn m3 of gas storage capacity it is offering to third parties. Using this storage would allow the traders to stock up on gas at attractive summer rates and resell it in winter, when prices are higher.

“This would help to level out summer-winter price fluctuations and generate considerable savings for European consumers,” it said.