German gas TSOs plan Polish, Russian capacity upgrades

12/08/2020 08:50 Natural Gas


Several gas transmission system operators (TSOs) plan to convert German interruptible entry capacity into firm capacity at the German-Polish border and on entry from Russian state-controlled Gazprom's Nord Stream and planned Nord Stream 2 pipelines.

German operators Gascade and Ontras Gastransport, as well as Poland's Gaz System, plan to build additional infrastructure that would boost firm entry capacity to Germany from Poland later this decade.


Gascade plans to turn 407 GWh/d of dynamically allocable capacity (DZK) into freely allocable capacity (FZK) in addition to 261 GWh/d of existing FZK at Mallnow — where Russian gas arrives through the Yamal Europe pipeline. Entry FZK is due to fall to 261 GWh/d from 932 GWh/d following the merger of Germany's two gas markets, NCG and Gaspool, planned for 1 October 2021.


The merger is expected to cut Germany's firm entry capacity by 78pc because of internal infrastructure congestion. Regulator Bnetza has finalised plans to prevent offered capacity from falling. It will introduce a capacity overbooking and buy-back system, as well as additional market-based measures, rather than developing additional infrastructure. But the regime will only be in force until the end of the 2023-24 gas year.


From the 2024-25 gas year onwards, the amount of firm FZK considered to have been sufficient up to that point will be offered to Trading Hub Europe, Bnetza has said. Market behaviour following the merger will help identify this required capacity, and it will be included in Germany's network development plan for 2024-34.


Gaz System would not need to complete any additional physical upgrade to accompany the Gascade works, as existing technical exit capacity from Poland of 932 GWh/d would already be sufficient to meet the requested demand. But the Polish operator is participating in the process in order to market the incremental capacity as a bundled product, the operators said.


The operators will offer 534 GWh/d bundled together for the gas years from 2027-28 to 2041-42 at the auction for annual capacity in July, with 134 GWh/d set aside for future shorter-term auctions. Gascade plans to proceed with the required infrastructure works if there is sufficient uptake at the auction.


Ontras and Gaz System also plan to expand Polish exit and German entry capacity at the neighbouring GCP Gaz-System/Ontras virtual interconnection point to 48.7 GWh/d from just 87 MWh/d following the merger. The operators will offer just under 39 GWh/d for the 2026-27 to 2040-41 gas years, with remaining capacity also set aside for shorter-term auctions.

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