Agreement on gas flows from Slovakia to Ukraine

28 April 2014
by eub2 -- last modified 28 April 2014

A Memorandum of Understanding (MoU) enabling gas flows from Slovakia to Ukraine was signed in Bratislava on 28 April 2014. José Manuel Barroso, President of the European Commission, attended the ceremony together with Slovakian Prime Minister Robert Fico and Ukrainian Energy Minister Yuriy Prodan. The Commission acted as a facilitator in the negotiations that led to the breakthrough. Along with the MoU, the gas pipeline operators concerned – the Slovakian company Eustream and the Ukrainian company Ukrtransgaz – signed a Framework Interconnection Agreement today, laying out the technical details of the foreseen solution.

Currently, it is technically possible to ship gas from Poland and Hungary to Ukraine. Last year Ukraine imported around 2 billion cubic meters of gas from EU Member States.

Based on the solution which is presented in the MoU signed on 28 April, the existing and unused Vojany pipeline at Vel(ké Kapušany on the Slovakian side will be modernised during a short construction period. There is a clear perspective that 22 million cubic meters of gas a day can flow from Slovakia to Ukraine via the Vojany pipeline as from autumn 2014. This corresponds to approximately 8 billion cubic meters a year. Eustream will swiftly check some technical details in order to be able to confirm the implementation of this solution within a few weeks. Should this option unexpectedly prove not to be feasible, the alternative would be to start with a smaller volume and scale the pipeline up to 22 million cubic meters a day until April 2015.

The successful implementation of gas flows from the EU to Ukraine is seen as a 'win-win' situation for both parties. It allows Ukraine to access various gas sources - among them Norwegian gas or liquefied natural gas (LNG) from the global markets - at competitive prices. As a member of the Energy Community, Ukraine will ensure the implementation of the EU internal energy market legislation. The approximation of the Ukrainian legal and regulatory framework is a prerequisite for higher investor's confidence and could lead to a better use of Ukraine's immense gas infrastructure, for example as regards storage capacity.

However, the European Commission stresses that the solution which has been sealed is only a first step in enabling gas flows from Slovakia to Ukraine. Further options besides using the Vojany pipeline will be legally and technically assessed in due course.