Moldova will be able to conduct gas transmission through backhaul route

In accordance with the EU Code of Natural Gas Networks and the latest legislative amendments published in the Official Journal of December 22 this year, the Republic of Moldova will improve the process of natural gas transportation from/to Ukraine starting January 2021, initiating negotiations with the Customs Service with regards to virtual reverse gas flow.

Backhaul is the natural gas transaction, which involves the nomination and allocation of natural gas deliveries in the opposite direction to the main physical flow of natural gas, which takes place at certain unidirectional entry/exit points. This procedure is functional in European countries at the interconnection points.

Formerly, the Republic of Moldova could not provide virtual gas flows along the trans-Balkan pipeline because the national legislation did not encompass the procedure. According to the optimistic forecast, reverse virtual flows are expected to become functional in Moldova starting January 2021, subject to the approval of the appropriate procedures by the Customs Service. The backhaul will cover 50% of the available capacity of the main pipelines, which will be approximately 8 billion cubic meters (bcm)/year. Thus, the Republic of Moldova will be able to guarantee the flow of 17 million cubic meters (mcm)/day of natural gas to and from Ukraine, being able to transit over annual capacity of 3 bcm, along the Trans-Balkan pipeline in 2021 in the reverse direction, which constitutes an increase of four times the transit volumes in 2020.

"This means that the backhaul procedure is needed not only for the region, but also for Moldova," as stated by Vadim Ceban, chairman of Moldovagaz's board of directors, to ICIS.

At the moment, there are 16 companies that have already signed contracts for the provision of natural gas transmission services.

Moreover, the major transit corridor of natural gas from the Russian Federation to the Balkan countries, passes through the Moldovan gas transmission system, and operated efficiently until January 2020.

Subsequently, Gazprom redirected exports from the Trans-Balkan route to the new TurkStream corridor. Thus, following the redirection of the nominated gas, without this revision of virtual redirection of flows, the transmission systems operator "Moldovatransgaz" risks to reduce its profit in 2021 by 44% compared to previous years.