Slovakia says work on gas link to Ukraine on schedule

PRAGUE Thu Jul 24, 2014 8:40am EDT

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PRAGUE (Reuters) - Construction work on a pipeline that will allow gas to be sent from western Europe to Ukraine is on schedule and the contracted capacity will be available from Sept. 1, Slovak pipeline operator Eustream said on Thursday.

Ukraine uses about 50 billion cubic meters (bcm) of gas a year and has increased efforts to secure more gas from the European Union after Russian producer Gazprom raised prices for supplies to Ukraine in a spat that has added to the crisis in the former Soviet state.

Russia covered half of Ukraine's gas needs last year but halted supplies on June 16 over the price disagreements and Kiev's outstanding debt for earlier deliveries.

The Slovak pipeline - an upgraded older link leading from the Vojany power station near the Ukrainian border to the western Ukrainian town of Uzhorod - can supply up to 10 bcm of gas a year and an Eustream spokesman said this capacity would be available on an interruptible basis from September and on a firm basis from March 2015.

Testing of the pipeline will start in late August, the company said, adding that full capacity was booked until 2019.

Combined with available connections from Hungary and Poland, Ukraine can get obtain up to 16-17 bcm of gas from western Europe. Real flows through the existing Polish and Hungarian connections, however, have been smaller in the past two weeks, with Ukraine citing reluctance of companies within the EU to antagonize Gazprom.

Eustream said it has also moved ahead with constructions on an interconnector with Hungary, which should start test operations in September.

(Reporting by Jan Lopatka and Jason Hovet; Editing by Jason Neely and David Goodman)

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