Higher Ukraine gas tariffs may cut trader interest in Greek LNG
Date: November 11th 2024
Author: Dalibor Dobrić
Category: En.vision
Topic:
Natural gas
, Energy policy
Ukraine’s proposed increase in gas tariffs next year will have little impact on European prices but could dampen trading volumes via the so-called vertical gas corridor linking Greek LNG capacity with southeastern Europe, a regional expert told Montel.
“The higher prices of tariffs could diminish somewhat the appetite for traders using this route to deliver gas to, for example, Slovakia, Austria and Hungary,” said Martin Vladimirov, expert on energy security at Bulgarian think tank CSD.Ukrainian energy regulator Nerc published late last week new proposed entry and exit gas transmission tariffs for the new regulatory period 2025-2029.
Entry tariffs for almost all interconnection points are set to increase to EUR 10.3/tcm, up from their current level of EUR 4.1/tcm. Exit tariffs for Poland, Slovakia and Hungary are to be raised from EUR 7.6-8.6/tcm to EUR 14.6-15.8/tcm.
Exit tariffs to Moldova and Romania are to be raised to similar levels, except for Romania’s interconnector at Orlivka, which will see an increase to EUR 2.50/tcm, up from EUR 1.05/tcm.
Southern supply
However, the share of gas tariffs in the final pricing of gas was small, Vladimirov said. “Where I see potential future impact is on the vertical gas corridor linking Aegean LNG regasification terminals with central Europe,” he added.Since Russia invaded Ukraine in 2022, its pipeline gas supply to Europe has dropped from more than 45% of total supply to less than 20%. Europe has turned to LNG to make up the shortfall, particularly looking to the US, while the EU aims to phase out all Russian gas imports by 2027.
The EU-backed vertical corridor initiative – connecting Greece with Bulgaria, Romania, Hungary Slovakia, Moldova and Ukraine via new and existing pipelines – is hoped by market participants to improve supply from other regions amid the looming expiry of Russian gas transit shipments via Ukraine at year end.
Greece launched a 5.5bcm/year floating storage and regasification unit (FSRU) – the country’s first – in October, complementing the existing 7bcm/year Revithoussa LNG terminal near Athens.
No Russian border tariff
Proposed tariff changes were based on the presumption of an end to Russian gas transit to Europe via Ukraine from 2025, Nerc said.The list of tariffs, therefore, does not include interconnections with Russia. This could in theory be revised should an agreement on the transit of Russian or Azerbaijani gas be reached, according to local reports.
Current short-haul tariffs will remain unchanged until 31 March 2025.
The proposal is to be opened for public debate on Wednesday, for adoption at a later date.
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