Fluxys finances TENP, Transitgas reverse capacity

OREANDA-NEWS. Belgian system operator Fluxys will bear the full cost of making the Transitgas and TENP systems bidirectional from the end of summer 2018.

The firm announced its final investment decision on the reverse flow project today.

Shippers will be able to deliver gas from Italy to northwest European markets by the summer of 2018.

Northbound entry capacity into the Transitgas system from Italy into Switzerland will be 432 GWh/d. The Transitgas system traverses Switzerland and reaches the French border at Oltingue, where exit capacity will be 96 GWh/d, and the German border at Wallbach, where exit capacity will be up to 240 GWh/d. The Tenp pipeline connects Wallbach to the Belgian and Dutch systems via west Germany.

The investments will include the first deodorisation plant in Europe on the German side of the Swiss-German border, to allow Germany to receive previously odorised gas. Only France odorises gas in the arterial — rather than local — grid, but as France exports gas to Switzerland and Italy, the odorised gas could be moved to Germany through the planned northbound capacity.

Fluxys plans an initial stage linking the Italian, Swiss, French and German markets, which, given a favourable market response, could be scaled to include capacity into the Gaspool market area, Belgium and onwards to the UK through the bidirectional Interconnector.

An earlier open season to gauge interest in northbound Transitgas capacity in late 2012 failed because the 15-year commitment required proved too lengthy for shippers.

But there is a business case to invest, Fluxys said today. New supply which is set to arrive in Italy including through the Tap pipeline — in which Fluxys holds a 19pc share — could change the trend for PSV prices to hold a premium to neighbouring markets. Although the Tap project is not expected to come online until 2020, supply and demand dynamics mean the Italian PSV could fall below those at Germany's NCG from summer 2018 onwards, Fluxys said.