Gas Transmission System Operator of Ukraine LLC became an observer in the European Network of Transmission System Operators in gas (ENTSOG) after unlocking the long-pending unbundling process last year.
The new GTS operator of Ukraine was founded in 2019 following the adoption of a new resolution, which changed the existing ownership model to an independent system operator in alignment with the EU’s Third Energy Package and separated its gas transmission system from supply and production. From 2015 JSC Ukrtransgaz represented Ukraine in ENTSOG but after the successful unbundling, the company lost its status as of 1 January 2020, and LLC Gas TSO of Ukraine, as a new independent TSO, applied to join ENTSOG.
Sergiy Makogon, General Director of GTSOU welcomed the decision of the General Assembly to grant observer status to the Ukrainian GTS operator highlighting that it comes as a result of several months of liaising, in particular on the harmonisation of legislation and procedures, as well as on transparency and security of supply. Mr Makogon expects that cooperation with ENTSOG will enhance and ensure the further development of the gas market of Europe and Ukraine as its integral part.
The observer status in ENTSOG is an important step for the Gas TSO of Ukraine as it provides access to the main European focal points in the gas transport sector. The cooperation with ENTSOG extends to joint response in crisis and emergency situations as well, which is a sensitive area for Ukraine considering its history with Russia’s Gazprom, that transports gas through the country to its European markets.
The unbundling of transmission operations from state supplier Naftogaz was one of the main conditions set by Gazprom during negotiations for a new transit contract with Ukraine. At the end of last year, just a day before the expiry of the previous ten-year contract between their national gas companies, Ukraine and Russia struck another five-year agreement that guarantees the flow of gas to Europe.
Ukraine ceased to import gas from Russia in 2015, following the 2014 annexation of the Crimean Peninsula. Since then all of its imports – a total of 14.3 billion cubic metres (bcm) in 2019 – are coming from the European markets (mostly of Russian origin) through the reverse-flow schemes. All of the supplies that enter Ukraine’s gas network from the East are intended to be transferred westwards. But Russia aims to weaken the position of Ukraine as a transit country and eventually cut it off from the shipments by securing alternative routes to its European markets through the construction of Nord Stream 2 and Turkish Stream.