22 Nov 2019 18:21

New gas transport system operator provisionally certified in Ukraine

KYIV. Nov 22 (Interfax) - Ukraine's National Commission for State Regulation of Energy and Public Utilities (NCSREPU) has provisionally certified LLC Gas Transmission System Operator of Ukraine (GTSOU).

The relevant decision was adopted on November 22.

"The decision has been made. Congratulations to the Operator of the GTS," said NCSREPU head Valeriy Tarasyuk following the vote, noting that a number of conditions need to be met before final certification is granted.

"This still isn't all the documents, all the data that are needed. For the final certification, we'll work together and prepare other documents," Tarasyuk said.

The head of GTSOU, Sergiy Makogon, said before the commission made its decision that an important element of preparations for talks on the transit of natural gas through Ukraine is the unbundling of transmission operations from Naftogaz Ukrainy.

"Today's a very important day for us, we've been moving toward it for a long time. Ukraine took upon itself the responsibility to unbundle back in 2009, when it signed the Protocol on Accession to the Energy Community. This is also a requirement of the Law on the Natural Gas Market that was adopted in 2017. This is an important step not only in terms of the adaptation of European legislation, but also in terms of our negotiating process with Gazprom on continuing transit," Makogon said.

According to the document that has been elaborated, the commission must inform the Secretariat of the Energy Community of the provision certification. Following a review, the national regulator will make a final decision.

On September 18, Ukraine's government updated its plan for unbundling Naftogaz. The new operator will be the GTSOU, a 100% subsidiary of JSC Ukrtransgaz, which has been maintaining the system since July 1, 2019 and has the needed personnel.

The Operator will be transferred to NJSC Main Gas Pipelines of Ukraine, which is now wholly owned by the Finance Ministry.

The government will also entrust the new operator with running the GTS over a 15-year period. The new operator will be able to start working at full capacity on January 1, 2020.

The new unbundling model is in line with the Third Energy Package, which could pave the way for the signing of a new transit contract with Russia in accordance with European rules.

The current ten-year transit contract between Naftogaz and Russia's Gazprom expires on January 1, 2020.

The GTS is a network of pipelines with a combined length of around 38,000 kilometers. It has 73 compressor stations and over 1,400 gas distribution stations.