Polish state-owned pipeline operator Gaz-System SA is able to offer
virtual reverse flow services on the Yamal-Europe natural gas pipeline because
potential contracts will likely be settled at a location on the German side of
the Polish-German border, a person familiar with the matter said Thursday.
Making the point of settlement at Mallnow, an exit point of the pipeline
located in the German town of Lebus, would enable potential German sellers of
natural gas to sidestep a contract term with OAO Gazprom (GAZP.RS) that states
Russian gas flowing through the pipe is the property of the Russian state-owned
gas giant, not the party that purchased the gas, until it leaves Polish
territory, the person told Dow Jones Newswires.
"Settlement of the virtual reverse will take place at the Mallnow point,
outside
Poland
's
borders, as well as at exit points of the Yamal pipeline into the Polish system
at
Wloclawek
and/or Lwowek," Gaz-System said Thursday.
Gazprom wasn't immediately available for comment.
Under this virtual reverse flow arrangement, the physical gas would be released
within
Poland
, the
person said. The exit points Gaz-System is offering at
Wloclawek
and
Lwowek are in central and western
Poland
,
respectively.
In early September,
Poland
took
steps to liberalize its natural gas market when the country's energy regulator
URE approved a procedure enabling buyers of Russian Yamal-delivered gas in
Germany
to
sell it back to buyers in
Poland
. A
month later Gaz-System said total requests for the service exceeded the
pipeline's reverse flow capacity, which allows for delivery of about 2.3
billion cubic meters a year.
Skeptics who doubt whether the reverse flow service will actually be used by
Polish customers to buy gas from sellers in
Germany
have
a point, the person said. Potentially, Gazprom could buy up the entire 2.3
billion cubic meters spare capacity, effectively paying Gaz-System for a
service it wouldn't use, as the gas wouldn't flow through the pipeline to a
buyer.
"However, once it happens and turns out to be real, the trend will be
unstoppable," the person said. "Other customers in
Poland
and
sellers in
Germany
will
then also clamor for the service, once they see others using it."
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,
which holds some 112.6 trillion cubic feet of gas reserves, the fifth largest
gas reserves in the region, produces only 1 billion cubic feet a day, some 700
million out of which is being flared.
Iraq
signed last year with Booz & Company an $8 million contract which is
co-financed by the Iraqi government and the World Bank, Ghadhban said.