December 24, 2019, Kyiv – Today, the NEURC made its final decision on the certification of Gas TSO of Ukraine LLC (OGTSU). The decision is valid from January 1, 2020. Besides, the Regulator approved the license on natural gas transportation business activities for the new Operator as of January 1, 2020, and set tariffs on natural gas transportation services for the entry/exit points from the GTS at the interconnection points for 2020-2024.
“Today, we became a fully-fledged European operator of the natural gas transmission network in Ukraine. Now it is final, the independent Ukrainian Operator will start to operate from January 1, 2020. Although, there is still a lot of work ahead,“ said Sergey Makogon, CEO of the OGTSU.
In the next few days, OGTSU needs to pay for the license, submit to the NEURC the copies of the acts of the transfer and acceptance into the property, as well as the document confirming the relevant information has been put into the Unified Register of State Property.
“The implementation of the GTS unbundling was one of the hardest challenges in recent years. The enormous amount of work, the continued uncertainty with key political decisions, and the lack of experience in Ukraine of such large-scale transformations – all this forced the team to work with maximum efficiency. Timely completion of unbundling has significantly strengthened Ukrainian positions in the negotiations on gas transit,” said Andriy Kobolev, Chairman of the Board of the Naftogaz of Ukraine.
Thus, the process of unbundling is reaching its logical conclusion. The new GTS operator will be separated entirely from the Naftogaz Group. From January 1, 2020, the authority to manage the GTS of Ukraine will be transferred from Ukrtransgaz JSC to Gas TSO of Ukraine LLC.
Timeline of the certification process of the OGTSU LLC
2014 – Ukraine has decided to expand economic relations with the EU countries and become a full member of the European gas market. To reach this goal, the Ukrainian Government signed an Association Agreement with the European Union, under which Ukraine has undertaken to carry out reforms in the country. In particular, in the gas market, to unbundle the gas transmission operator (separation of gas transportation activities from production, distribution, and supply) and switch to daily balancing.
2015 – The Verkhovna Rada of Ukraine adopted the Law “On the Natural Gas Market”.
2016 – The Cabinet of Ministers of Ukraine approved Resolution No. 496 “On Separation of Activities for the Transportation and Storage (injection, withdrawal) of the natural gas.”
2017 – MGU PJSC is registered by the State Registrar. Data on the Company are included in the Unified State Register on the state registration of a legal entity.
February 04, 2019 – Ukrtransgaz JSC has decided to establish Gas TSO of Ukraine LLC.
February 05, 2019 – Gas TSO of Ukraine LLC is registered with the State Registrar. Data on the Company are included in the Unified State Register on the state registration of a legal entity.
June 01, 2019 – More than 10,000 employees were transferred from Ukrtransgaz JSC to Gas TSO of Ukraine LLC.
On July 01, 2019 – Ukrtransgaz JSC transferred the function of the technical operation of the gas transportation system to the Gas TSO of Ukraine LLC.
September 18, 2019 – The Cabinet of Ministers of Ukraine adopted Resolution No. 840 “On Separation of Natural Gas Transportation and Provision of Operations of the Gas Transmission System Operator”, which selected the model of separation of natural gas transportation activities as a model of separation for the state-owned GTS and not subject to privatization. The resolution stipulates that Gas TSO of Ukraine LLC has the right to submit a request for certification as a GTS operator to the NERCEP. In addition, the plan of measures to fulfill the requirements for separation and independence of the GTS operator was approved, in particular – the transfer of OGTSU LLC to the ownership and management of the state company MGU PJSC , which is subordinated to the Ministry of Finance of Ukraine.
On the same day, the Cabinet of Ministers of Ukraine adopted Resolution No. 791-r, which delegates to the Ministry of Finance the powers for managing the corporate rights of the state with respect to the MGU PJSC.
September 27, 2019 – Gas TSO of Ukraine LLC launches a subscription campaign: gas market participants are invited to sign a transport contract with a suspended circumstance.
October 01, 2019 – The Central Physical and Commercial Dispatching Ukrtransgaz JSC, which coordinates the operation of the GTS of Ukraine, has been moved to the Gas TSO of Ukraine’s office.
October 04, 2019 – Gas TSO of Ukraine LLC has applied to the NEURC for certification as a gas transmission system operator. In parallel, the application was submitted to the Secretariat of the Energy Community of the European Union.
October 07, 2019 – Gas TSO of Ukraine LLC has agreed with the Secretariat of the Energy Community changes to the regulatory framework for carrying out the unbundling and submitted them to the relevant state bodies for processing.
November 12, 2019 – Gas TSO of Ukraine LLC submitted a package of documents to the NEURC for obtaining a license for the right to carry out business activities for natural gas transportation.
November 15, 2019 – President of Ukraine Volodymyr Zelenskiy signs the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine in connection with the Separation of Natural Gas Transportation Activities”, which permits the separation of natural gas transportation activities from Naftogaz of Ukraine (unbundling).
November 22, 2019 – NEURC approved the preliminary certification of Gas TSO of Ukraine LLC.
December 17, 2019 – The Secretariat of the Energy Community supports the certification of the GTS Operator of Ukraine.
November 24, 2019 – NEURC made the final decision from January 1, 2020 (effective date) to certify and license Gas TSO of Ukraine LLC as well as to set tariffs for natural gas transportation services for entry/exit interconnection points for 2020 – 2024 years.