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Regulation 'unrelated' to Slovak-Ukraine maintenance issue: RONI

Highlights

Caused by 'previously announced' works, not CAM NC applicability

No application of CAM NC on Ukrainian border until now

Technical solutions being sought under ENTSOG supervision

London — Slovakia's Regulatory Office for Network Industries, or RONI, effectively the country's energy regulator, told S&P Global Platts that the application of pan-European natural gas network regulation is "unrelated to the present problem" of the ongoing maintenance dispute between network operators in Slovakia and Ukraine.

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Ukrainian network GTSOU plans to perform planned maintenance works downstream from the Budince interconnection linking the two countries from August 11, which would entail interruption at a time when shippers have booked considerable capacity and may have purchased gas contracts to export into Slovakia; these posing a downside risk for European gas prices if the volumes cannot be exported.

GTSOU has previously highlighted the Slovakia's deficiency in regulatory compliance to the European Union's Capacity Allocation Mechanism Network Code or CAM NC, and urged authorities in the country to allow for Budince capacity purchases to be transferred to the Velke Kapusany interconnection to resolve the current deadlock between the two networks.

"We consider this topic as unrelated to the present problem, which is caused by planned maintenance works in Ukraine that were previously unannounced, and not by CAM NC applicability," a spokesman for RONI said.

"The capacity at the Ukrainian border are offered on a first-come-first-served basis," the spokesman continued. "The principle itself is, in our view, transparent, done on an online basis by EU Stream, and has certain benefits for market participants."

"Thus, while we duly apply the CAM NC on interconnection points with EU members, we have until this moment not chosen to apply it at the border with Ukraine."

EU Stream told Platts that the switching of contracts suggested by GTSOU "is not recognized by our regulation," and "independent of unilateral actions of neighboring operators."

Ukraine is part of Europe's Energy Community, and as such is implementing EU energy market rules and structure to enable greater integration into the wider European market. It has previously called up Slovakia to "find a solution based on European rules", and has recently cleared the switching of contracts on its side with its own regulator NERC.

Technical solution

The spokesman also told Platts it has been informed that a technical solution is also being sought, with the European Network of Transmission System Operators for Gas representative body overseeing efforts, while reiterating it was not a matter for regulatory bodies.

"We have been informed that [the TSOs have agreed to explore] available technical solutions to avoid interruptions of the pipeline on the Ukrainian side, [which] will be analyzed in detail, under [the] supervision of ENTSOG," the spokesman said.

"We consider such agreement to focus on the technical solution as a step forward in solving the problem, as the discussed regulatory measures are not feasible," he added.

Commenting on the Ukrainian proposals in a separate statement, RONI said that: "While we respectfully consider the propositions by the Ukrainian side, we believe that technological problems are primarily to be dealt with by technological, not regulatory means,"

RONI had also previously said that the introduction of a Virtual Interconnection Point, pooling the capacity of the two interconnections, was not feasible in the given time frame.

Other VIPs across Europe have taken many months to establish, causing major implementation headaches for national networks.

In describing its energy regulation jurisdiction, the RONI website states: "Over the transport of energy on its route from the production source to the outlet in the consumer´s apartment, [we will] permanently have to watch a certain state authority that prevents the abuse of the supplier's or network operator's monopoly position at the expense of consumers."