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Ukraine 'unable' to meet demand for gas exports to Poland: GTSOU

Highlights

Demand exceeds technical capacity, grid operator says

Ukraine-Poland technical capacity is 12.9 million cu m/d

Kyiv — Ukraine has been unable to meet robust demand for gas exports to Poland over the past several days due to existing capacity limitations, Serhiy Makohon, head of gas grid operator GTSOU, said Jan. 12.

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The current export capacity from Ukraine to Poland is some 12.9 million cu m/d, but traders' orders have exceeded capacity in recent days.

"There has been great demand for capacity to enter Poland, which has exceeded the technical capabilities," Makohon said in a statement. "This situation periodically arises due to the pricing environment in the gas markets."

He said similar problems had recently been observed for imports into Ukraine from Hungary, and then for imports into Ukraine from Poland.

Ukraine exported about 120 million cu m of gas to Poland over Jan. 1-10, according to GTSOU. At least 110 million cu m were supplied by Gazprom, according to an industry source.

Gazprom traditionally supplies the Polish market through the Yamal-Europe system via Belarus, but has also booked capacity to enter via Ukraine in 2021, the source said.

Gazprom Export declined to comment Jan. 12.

Short-haul offer

The limitations were also causing GTSOU to cut back on its offer for short-haul gas capacity, a model that allows for reduced transportation tariffs when transferring gas between markets or sending it for storage injection.

GTSOU said that orders for short-haul services had reached 3 million cu m due to increased demand for gas in Europe, but the company had been forced to proportionally limit short-haul volumes for customers to about 1.7 million cu m.

Makohon dismissed concerns that GTSOU may have been artificially restricting exports to Poland.

"All capacity is offered to market participants on competitive and transparent terms," Makohon said. "Annual, quarterly, monthly and daily capacities are sold on the auction platform and anyone interested can participate."

"The standard recommendation for traders looking for guaranteed capacity is to buy longer duration products," Makohon said. "Next week there will be auctions for monthly capacities for February. We invite everyone."