Gazprom to build additional underground storage facilities in EU countries

Gazprom plans to build additional underground gas storage facilities in Germany, the UK, the Czech Republic and Turkey, ITAR-TASS reports with reference to the company's corporate publication.

The new facilities will be built to supply Russian gas on Nord Stream and South Stream pipeline systems. The development of the storage system in foreign countries will allow Gazprom to increase active capacities in the next decade to nearly six billion cubic meters of gas.

In preparation for the autumn-winter 2013/2014 season, four billion cubic meters of gas was loaded into underground gas storage facilities (UGSF) in foreign countries (including rental contracts and buffering capacity volumes).

By the beginning of the current year, total active capacity of European UGSFs, used by Gazprom, made up 4.51 billion cubic meters (including rent). By 2015, the figures will grow as the new UGSF Bergermeer in Holland reaches full capacity. Under the agreements of Gazprom concluded with consortium TAQA (Abu Dhabi) and EBN (Netherlands), Russia receives a share of 42% in the project. Gazprom provided buffer gas for the UGSF Bergermeer and received the right to access the capacity of the storage system in the volume of 1.9 billion cubic meters. The work on the project started in 2010; commercial operation, in the interests of Gazprom, is planned to be launched during the current year. Reaching the full capacity of 4.1 billion cubic meters of gas is planned to take place in the spring of 2015. Gazprom will then be able to increase the storage capacity in foreign countries to 4.3 billion cubic meters.

The Russian company will use Bergermeer UGSF on a par with Rehden UGSF as a basic storage to ensure smooth operation of the Nord Stream export system.

In the short term, Haidach (Austria) and Banatski Dvor (Serbia) storage systems  will be an important element in ensuring reliability of Russian gas supplies on the new export route, the South Stream.

Gazprom currently uses the capacities of Haidach - 1.7 billion cubic meters. In Banatski Dvor, the share of Gazprom makes up 230 million cubic meters. In the future, the capacity of the Serbian UGS may grow up to 1 billion cubic meters.

Meanwhile, Russian gas monopoly Gazprom has postponed the introduction of prepayment contractual terms for gas for Ukraine until June 9, said the head of Gazprom, Alexey Miller.

According to Miller, the introduction of pre-payment terms will depend on the repayment of the debt of 2.2 billion dollars in full.

"The introduction of pre-payment mode will depend on the repayment of the debt for the gas delivered before April 1 - 2.237 billion, a part of which was paid today. Payments for the deliveries of gas in April and May are also important. The payment for May must be made before June 9," Miller said.

Representatives of the Ukrainian side said that Naftogaz of Ukraine made the first payment to Russia's Gazprom on Friday night soon after the negotiations in Berlin. However, the payment was in 2.5 times smaller than the amount announced by the results of the previous tripartite talks - 2 billion dollars.

Explaining the amount of the payment made - 786 million dollars - Ukrainian Energy Minister Yury Prodan said in Berlin that it was the only undisputed portion of the debt - the payment for the gas that Russia supplied to Ukraine at 268.5 dollars per thousand cubic meters from January 1 to March 2014 year.

Gazprom evaluated Ukraine's debt for natural gas, as of the end of April, at $ 3.5 billion; by June 7, in the case of non-payment, the debt may grow to $5.2 billion. Ukraine is supposed to pay the pre-payment invoice before June 3. Should the country ignores the requirement of the seller, Gazprom will start to deliver the amount of gas that is only necessary for transit to customers in Western Europe.

Another ministerial meeting on gas between Russia, Ukraine and the EU will be held in Brussels on Monday.

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Author`s name Dmitry Sudakov