Ukraine Can Now Swap Gas Virtually with Slovakia: Naftogaz

The newly-formed Gas Transmission System Operator of Ukraine (GTSOU) is able to start exchanging gas virtually with Slovakia this year, Ukraine’s national gas company Naftogaz said on social media on January 21.

“There are physical gas flows from Slovakia to Ukraine. We hope that this year the independent operator, within the framework of new agreements with the Slovak side and Gazprom, will be able to launch virtual reverse,” Naftogaz tweeted. “It’s more profitable – you don’t have to spend gas on pumping back and forth.” 

Ukraine currently transits Russian gas to Slovakia and its other EU neighbours, but then receives some volumes back which it has purchased from European suppliers. So-called virtual reverse flow would allow Ukraine to simply subtract its purchases from the transited volumes before they leave the country, cutting transport costs and allowing it to access greater volumes.

Ukraine’s previous interconnection agreements with Russia’s Gazprom and Slovakia’s Eustream did not allow for virtual reverse flow. Gazprom did not allow its transport contract to be amended and Ukraine solved the problem with a new link, which carried only a small amount of gas. However GTSOU, which was recently spun off from Naftogaz, reached new agreements with the two companies in late December which now make it possible.