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Eastring gas project could link central, SE Europe: Eustream exec

London — A Eur2 billion ($2.2 billion) pipeline project being promoted by Slovakian gas transporter Eustream could help connect the gas markets of central and southeast Europe, Eustream told Platts in an interview.

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Rastislav Nukovic, the general director of Eustream, told Platts that the Eastring project "would connect western liquid markets to southeast Europe and Turkey" and could be providing 20 Bcm/year of capacity by the end of 2019.

The pipeline would start at Velke Kapusany, an existing compressor station on the Slovak/Ukraine border. From there it would either loop around Hungary's northeast border into Romania through a new pipeline, or could use an existing pipeline into Romania through Ukraine.

Eastring would then go southeast through Romania, heading past local gas storage facilities, before taking one of two alternative routes.

The "Isaccea" option would head east from the middle of Romania, connecting into the existing Trans-Balkan line at Isaccea on the Romania/Ukraine border. This would provide a connection through the existing system south to Bulgaria and the Turkish border at Malkoclar.

The direct "Malkoclar" option would head southeast across Romania and over the Romanian/Bulgarian border heading straight for Malkoclar.

The Isaccea route would run for 832 km and cost Eur1.8 billion in the latest costings. The direct Malkoclar route would run for 1,015 km and cost Eur2.2 billion.

Both could offer 20 Bcm/year of bi-directional capacity from the end of 2019 at the earliest, if all goes well with the project.

Adding compressor stations could later boost capacity to 40 Bcm/year, by 2023 at the earliest.

For the initial loop from Velke Kapusany into Romania, the promoters are considering the routes through both Ukraine and Hungary.

"Both are still valid" options, said Nukovic.

There are "some limitations on the technical parameters" on the existing Ukraine route, he said, and investment would be required, so the new pipe is also being considered via Hungary. COULD TAKE TURK STREAM GAS

The Eastring project was first announced during the Central European energy conference held in Bratislava last November, with initial talks with potential partners taking place in December.

Eustream's transmission of Russian gas from Ukraine to western Europe has been falling in recent years due to Russia's development of alternative routes such as Nord Stream.

"The use of our system had been dropping step-by-step so we were looking for new business opportunities and utilization of our system," said Nukovic. Slovakia, Hungary, Romania and Bulgaria signed a joint declaration in May in Riga supporting market integration. Eustream has had discussions with neighboring pipeline operators. Nukovic said the project was announced before Russia's South Stream project to carry gas across the Black Sea to Bulgaria was canceled. Russia is now planning to send gas across the Black Sea to Turkey through Turk Stream. He said that Eastring could be a route for Turk Stream gas to be delivered onwards into Europe.

"We don't consider this project as competition [with Turk Stream], that could be one of the potential sources of gas, of course respecting EU rules," he said.

Eastring will offer third-party access to the market as a whole. "The Eastring project will respect all EU legislation and spirit, especially regarding third party access," he said.

As a potential route for Turkish, Azerbaijani or Middle Eastern gas to flow into Europe, Eastring could serve a similar purpose to the Trans Adriatic Pipeline that will carry gas across Greece to Italy. But Nukovic said Eastring is "not direct competition" with TAP and "could be perceived as complementary." PROJECT OF COMMON INTEREST

Eustream is pressing on with the project.

"Probably the most important [next step] is to be included on the list of [European] Projects of Common Interest," Nukovic said. This would make Eastring eligible for EU funding.

Eustream together with partners is working to supplement a transmission system operators' cost/benefit analysis with financial and economic data.

The company is also carrying out feasibility studies, preparing a tender for engineering works, and there are discussions at a political level, because intergovernmental agreements will be needed to make the project work.

--Alex Froley,
--Edited by James Leech,