Changes to tariff-setting along the gas delivery route from Greece to Ukraine could make the route more attractive for south-to-north gas deliveries, market participants told Argus.
The previous bundled Route-1-3 products, designed primarily to support Ukraine's security of supply during the war, ceased to be available from 1 October this year.
The new approach was developed as a longer-term commercial solution for the route and it allows shippers to book individual sections of the route separately, allowing greater flexibility over where gas enters or exits the corridor. Capacity is available for booking through standard daily, monthly, quarterly and annual products, replacing the previous special monthly end-to-end products.
Shippers can also exit gas at any virtual trading point (VTP) along the route, subject to licensing and other regulatory requirements in each country where they trade.
Tariffs in Greece and Bulgaria have been reduced, while regulators in Romania and Moldova have introduced conditional capacity products.
Conditional capacity offers cheaper transit
New conditional capacity discounts in Romania, Moldova and Ukraine could lower the cost of shipping gas northwards through the Trans-Balkan route, making supplies from Greece to Ukraine and Slovakia more competitive with alternative sources, market participants told Argus.
Shippers transiting gas through Romania and Moldova towards Ukraine without accessing the countries' VTPs can benefit from discounted conditional capacity.
Shipping gas to Ukraine using quarterly bookings and conditional capacity where available costs around €6/MWh from Bulgaria and €7.50/MWh from Greece, according to a trader.
Traders can receive a 60pc discount on Romanian conditional capacity if they book entry capacity at Negru Voda 1/Kardam equal to the exit capacity booked at Isaccea 1/Orlovka.
Further along the route, Moldova offers a 90pc discount on the entry tariff at Kaushany for annual and shorter-term capacity used to transit gas towards Ukraine, provided shippers book at least an equal amount of exit capacity at Grebenyky. And shippers moving gas northwards towards Ukraine can receive a 99pc discount on conditional capacity at Orlovka/Isaccea and Kaushany, provided they book at least an equivalent amount of entry capacity at Grebenyky for the same period.
The revised structure could also make the corridor more relevant for deliveries beyond Ukraine, including towards Slovakia, a market participant said.
There is currently little financial incentive to move gas into Ukrainian storage, limiting demand for south-to-north capacity, he added. But the route could become more attractive next year if storage economics improve or if traders seek to move gas further north towards central European markets.
