Ukrtransgas transferred the technical function of Ukraine’s gas transmission system to the subsidiary

July 2, 2019, Kyiv – Since the July 1, the technical function of the gas transmission system was transferred from the Ukrtrasgaz JSC to the GAS TSO LLC, 100% ownership of Ukrtrasgaz JSC. This is the next preparation step in legal and operational unbundling of the gas transmission from the production and commercial functions. The legal separation is the essential requirement for the independent GTS operator certification, engagement of the international partner, and keeping the gas transit through the territory of Ukraine.

The company will operate as a separate legal entity under the control of Ukrtransgas JSC until December 31, 2019, until the expiration of the current contract with the Gazprom.  During this time, the Operator must obtain all necessary licenses and undergo preliminary certification by the local Regulator (NEURC) with further confirmation by the Secretariat of the Energy Community.

On January 1, 2020, the Gas TSO LLC will be transferred from the Naftogaz Group to the organization authorized by the Cabinet of Ministers of Ukraine. This step will completely fulfill all the conditions on the unbundling of the independent gas transmission operator.

Currently, Gas TSO LLC and Ukrtransgaz JSC are cooperating under the level service agreement on technical maintenance. About ten thousand people directly involved in the operation of the GTS, including planning, maintenance of the networks, and object, as well as data analysis, were transferred to the Gas TSO LLC. At the same time, commercial, dispatching, procurement departments remain within the Ukrtransgaz JSC until the expiration of the contract with Gazprom that requires the current license. These functions will be transferred to the new Company on January 1, 2020, after its certification.

Company’s management structure was simplified in line with the European standards that increased the efficiency of the gas transmission system. The new structure was tested at the preliminary stage if unbundling within the TSO Branch that previously serviced the system.

During the second half of 2019, the final separation of business processes and IT systems between the GTS Operator of Ukraine, the Gas Storage Operator of Ukraine and the service units of Ukrtransgas JSC should take place.