Natural Gas Transmission

FGSZ Földgázszállító Zrt. (hereinafter FGSZ) is the sole transmission system operator of the nearly 6,000 km long high-pressure natural gas transmission pipeline system in Hungary. It performs its activities under regulated market conditions. In international comparison, the Company’s grid is operated according to the highest technological standards. FGSZ belongs to companies of strategic importance within the region. Aside from domestic natural gas transmission, FGSZ conducts transmission activities towards Serbia, Bosnia-Herzegovina, Romania, Croatia, Ukraine and Slovakia. Its dynamism and efficiency make the company one of Europe’s most significant natural gas TSOs.

HIGHLIGHTS

  • 5,874 km long pipeline system
  • 25 entry points, nearly 400 exit points
  • 3 transmission regions with 2-2 sites, 8 compressor stations
  • High technical class control centre in Siófok
  • Record transmission volumes of 24 bcm in 2019

FGSZ is the sole transmission system operator of Hungary. It performs its activity under market conditions regulated by law. Besides the domestic natural gas transmission, FGSZ is also engaged in international transmission activities and operate bidirectional interconnection points with Slovakia, Ukraine, Romania and Croatia, a unidirectional inlet point from Austria, and a unidirectional exit point to Serbia. The security of supply of Hungary is inseparable from the energy security of the CEE region and whole Europe. Therefore, within the framework of European gas market cooperation based on mutual advantages, FGSZ aims to ensure the interoperability of the natural gas networks of the region on the part of Hungary; FGSZ also strives to increase the volume of transmission and transit through Hungary. The developments of the pipeline and trade infrastructure implemented by FGSZ in the recent years laid down the foundations for the company’s future, and its regional activities. 

On October 10, 2019, FGSZ became the 100% owner of Hungarian Gas Transit Ltd. through the acquisition of the state-owned MGT shares, successfully completing the transaction to acquire MGT’s line of business and its state-owned shares. In October 2019, FGSZ took over the operation of the 92 km long natural gas transmission pipeline connecting Hungary to Slovakia, and on 31 December 2019, as a result of the multi-month transaction process closing, MGT and FGSZ were mergedAccordingly, as of 1st January 2020, FGSZ acts as the legal successor of MGT.

FGSZ's electronic capacity booking and trading platform, the Regional Booking Platform (RBP), enables, among other services, the allocation of gas transmission capacities and the conduct of secondary trade. In addition to FGSZ, RBP is currently used in 11 EU and non-EU countries, by the following natural gas transmission system operators: Eustream (Slovakia), Transgaz (Romania), Plinacro (Croatia), Bulgartransgaz (Bulgaria), DESFA (Greece), Gas Connect Austria (Austria), GASCADE (Germany), ONTRAS (Germany), Gaz-System (Poland), Gas TSO of Ukraine (Ukraine) and Gastrans (Serbia). As a result of a successful 3-year long development project, RBP and all other business applications of FGSZ (most notably the Informatic Platform and Trading Platform) were completely renewed in 2018, but the applications are continuously developed by FGSZ in line with regulatory and business needs. 

OUTLOOK

Regional pipeline developments

FGSZ, as a reliable and efficient operator of the Hungarian natural gas transmission system, intends to enhance flexibility and security of supply on the regional natural gas market. Developments aim to establish new routes or strengthen existing connections providing opportunities for system users to access new sources and exploit trading possibilities. FGSZ supports incremental developments, which are enhancing efficient utilization of the existing grid.

As a reliable and efficient operator of Hungary's natural gas transmission system, FGSZ is committed to strengthening the flexibility and security of supply of the regional gas market. Its developments are aimed at creating new routes and strengthening existing connections, providing opportunities for system users to access new resources and exploit commercial opportunities. FGSZ supports incremental developments promoting the more efficient use of the existing network.

Current projects

As the first virtual interconnection point on the EU-Ukraine border, as of 1 May 2020, FGSZ and its Ukrainian partner merged the two physical border crossing points on the Ukrainian-Hungarian border in Beregdaróc in a single virtual interconnection point (VIP Bereg). Thus, through the VIP, the applied rules have become simpler for the users of the neighboring natural gas transmission systems, enabling the more intensive booking and use of capacities between the neighboring entry-exit systems. Further purpose of the VIP is to facilitate gas transportation and trade between the two countries, as well as to ensure and strengthen liquidity and, consequently, market competition conditions in both gas markets.

Construction works on the Romanian-Hungarian interconnection (ROHU) project phase I was completed by 1 October 2019. Due to the new compressor station at Csanádpalota the existing interconnection offers an increased 1.75 bcma bidirectional capacity between Hungary and Romania from 1 Oct 2019. The Open Season procedure regarding ROHU project phase II ended without success in April 2020.

Regarding the Serbian-Hungarian border point (SRBHU), MEKH in its ordinances decided in April 2020 that FGSZ should submit a proposal for an unconditional infrastructure development investment with a capacity of 6 billion m3 / year, and after its approval implement the investment for this purpose until October 1, 2021. Any further expansion of the southern entry point capacity will depend on the outcome of a subsequent results of a market-based capacity expansion procedure.

As part of the Hungary-Slovenia-Italy (HUSIIT) gas corridor, the HUSI project aims to develop physical connection between Hungary and Slovenia, because currently Slovenia is the only neighboring country without direct pipeline connection with Hungary. As a result of this project a bidirectional gas transit corridor could be established between Italy and Hungary through Slovenia.

For the purpose of security of supply, FGSZ aims to ensure the transmission possibility of natural gas from every possible direction to Hungary. FGSZ also strives to become an integral part of the region’s gas transmission network by making existing cross-border interconnections bidirectional and expanding its capacities.