Natural Gas Transmission

HIGHLIGHTS

• 5,889 km long high-pressure pipeline system
• 28 entry points, nearly 400 gas delivery stations
• 3 transmission regions with 2-2 sites, 8 compressor stations
• 6 interconnection points
• High technical class control center in Siófok
• ~700 employee
• Transmission volumes (2023): 15,5 bcm

ACTIVITY

FGSZ is the sole transmission system operator of Hungary. It performs its activity under market conditions regulated by law, according to the ITO certificate. The Company’s main activity is the construction, operation, and allocation of natural gas transmission capacity, of which it offers yearly, quarterly, monthly, daily, and within day firm and interruptible capacities through auctions. The Company’s main responsibilities include the odorization and continuous quality control of natural gas delivered to partners for safety purposes, the maintenance of the hydraulic balance of the transmission system, as well as the measurement of quantitative and qualitative characteristics of natural gas in a transparent manner, in compliance with the most stringent international standards.

FGSZ plays an important role in delivering gas production to consumers in Hungary and, to meet the needs of domestic network users from imported supplies, it also carries out international gas transportation activities besides domestic gas transmission. It operates bidirectional interconnection points with Slovakia, Ukraine, Romania, Croatia, and Serbia, as well as a unidirectional entry point from Austria. The security of supply of Hungary is inseparable from the energy security of the CEE region and the whole of Europe. Therefore, within the framework of the European gas market cooperation based on mutual advantages, FGSZ aims to ensure the interoperability of the natural gas networks of the region from Hungary, and also strives to increase the transit volumes through Hungary.

To maintain and increase the operational safety of the natural gas transmission system, the Company applies the Pipeline Infrastructure Management System (PIMS) as part of its integrated management system and continuously improves the conditions necessary for safe operation.

DEVELOPMEN PROJECTS AND INITIATIVES

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 at establishing new routes and strengthening existing interconnections providing opportunities for network users to access new sources and exploit trading possibilities. FGSZ is also continuously implementing improvements to enhance efficient utilization of the existing network.

The primary objective of FGSZ's developments is to ensure the possibility to transport natural gas to Hungary from all potential directions, as well as to implement internal network improvements that will help to adapt to the changes in the international transport environment. By expanding its existing capacities, the company aims to become a key playerof the regional gas transmission network.

To develop interconnectors and establish new capacities, the expansion of both the HU-SK and the RO-HU interconnectors became part of the latest, fifth edition European Union list of Projects of Common Interest (PCI), published in 2021 Autumn. Regarding the RO-HU interconnector, expansion of its existing capacity in the direction RO>HU increased to 2.6 bcma in 2023. Upgrading to a level of 4.4 bcma could make a significant contribution to Hungarian supply source diversification efforts, since in the mid-term either Romanian Black Sea gas, gas from Azerbaijan, or Greek and Turkish LNG may arrive in Hungary via this route.

Slovenia is Hungary’s only neighboring country without a direct natural gas interconnector to Hungary. Negotiations on the HU-SI project for a new HU-SI interconnection are ongoing between FGSZ and its Slovenian partner, Plinovodi.

FGSZ is also involved in regional initiatives, such as the Vertical Corridor and the Solidarity Ring.

REGIONAL BOOKING PLATFORM

The Regional Booking Platform (RBP) of FGSZ is an IT application developed in accordance with the EU network code governing the capacity allocation mechanisms used in natural gas transmission networks and with other relevant EU and national legislation. The capacity allocation application enables capacity allocation procedures and secondary capacity trading among other services. Today – beyond FGSZ – sixteen other transmission system and storage operators use it partially or entirely throughout the EU and the Energy Community: Eustream (Slovakia), Transgaz (Romania), Plinacro (Croatia), Bulgartransgaz as a TSO and storage operator (Bulgaria), DESFA (Greece), Gas Connect Austria (Austria), Gaz-System (Poland), Gas TSO of Ukraine (Ukraine), Gastrans (Serbia), Moldovatransgaz and Vestmoldtransgaz (Moldova), Ontras, Gascade, and NEL Gastransport (Germany), the Greek-Bulgarian ICGB and the Hungarian storage operator Hexum. The applications are continuously being developed in line with regulatory and business needs.

LINEPACK FLEXIBILITY SERVICE

As a new business service, FGSZ launched the Linepack Flexibility Service (LPFS) in December 2022 owing to which network users could significantly reduce their costs related to balancing.

SUSTAINABILITY

In line with decarbonisation efforts, FGSZ places a strong emphasis on sustainability and tasks related to the green transition. The Company is exploring the adaptation possibilities of the existing transmission system to changing needs and to the transportation of renewable gases (biomethane and hydrogen), as well as the conditions of these gases entering the system. To better map market needs, in 2023 the first non-binding hydrogen demand assessment has been conducted, which revealed that significant quantities of clean hydrogen are needed in Hungary by 2030. This also underpins the Company’s work conducted in the European Hydrogen Backbone, where – together with other market participants – they are working to create regional hydrogen corridors. The Company is also working on a number of other projects to make its current operation more sustainable, carrying out methane leak detection and repair activities to reduce greenhouse gas emissions, as well as implementing energy efficiency improvements. FGSZ voluntarily participates in the OGMP (Oil and Gas Methane Partnership), quantifying and implementing methane emission reduction program, according to the organisation’s directives.