Ukrainian GTS – a competitive route in a non-competitive market – Sergiy Makogon

The Ukrainian gas transmission system is reliable, powerful and in good operating condition, as proven by years of uninterrupted gas supplies to the EU and the Ukrainian gas market. Gas TSO of Ukraine is being absolutely transparent in compliance with the European legislation. The gas route across Ukraine is competitive, however, it has to conduct the activities in an environment where one particular company is trying to gain illegal advantages and monopolize gas supply routes to the EU.

This was stated by Sergiy Makogon, CEO of Gas TSO of Ukraine, speaking at the Ukraine Gas Investment Congress.

“Ukraine is ready to guarantee the further provision of natural gas transit services to Europe in the amount of up to 146 billion cubic meters at competitive tariffs. However, in order to be fully competitive, we need an appropriate field for competition – with the same rules, requirements, opportunities and conditions for all the market players. Meaning that, all the transit routes must operate pursuant to the directives of the Third Energy Package and should be able to exercise their rights. We, as a country, have done everything that was required by the EU regulations – we have unbundled the operator of the GTS; we have  transparent tariff formation; we have implemented the European energy legislation and network codes. The next move is up to the EU, as Europe, above all, will suffer from Gazprom’s monopoly on gas transit,” said the head of the GTSOU.

According to Sergiy Makogon, the certification of Nord Stream 2 operator will be indicative in terms of observing the EU principle of energy solidarity. After all, the certification of Nord Stream 2 AG according to the ITO model violates the requirements of the EU Gas Directive and will allow the operator of Nord Stream 2 to remain part of the Gazprom Group, i.e. under the control of the dominant market player and incapable to ensure independent and unbiased transportation of gas through the pipeline.

European energy legislation requires the Nord Stream 2 operator to be completely separate and independent from Gazprom, and that rules of free access for third parties to the infrastructure, non-discriminatory, transparent tariffs be applied to the entire pipeline. Besides, the Ukrainian gas transmission system should be available for use to third parties at the Russian border, regardless of whether that party is from Central Asia or is another Russian producer of gas, not owned by Gazprom.

As Sergiy Makogon noted, for further development of the gas market in both Ukraine and Europe, it is important to maintain the physical transit of gas through Ukraine, provide access for foreign traders to Ukrainian UGSF, increase the production of gas in Ukraine, increase energy efficiency and prepare for the transportation of renewable gases.

It should be reminded that on October 20, Gas TSO of Ukraine submitted a request for intervention to the German Energy Regulator (Bundesnetzagentur) to participate in the Nord Stream-2 AG certification procedure.