Today, Naftogaz has published a proposal for a new Gas Transmission System Code which will regulate operation of the Ukrainian TSO and its interaction with other market participants. In terms of balancing, the new draft Code is based on the Commission Regulation (EC) No. 312/2014 dated 26 March 2014 approving the Network Code on Gas Balancing of Transmission Networks (further referred to as the “Balancing NC”). Naftogaz invites experts and market participants to discuss the draft available here.
The proposed version of the Gas Transmission System Code contains a number of changes emanating from standard practices in mature gas markets of EU countries, in particular:
- balancing is done on a daily basis, even at non-daily-metered points where data forecasts are used;
- imbalances are not calculated at separate entry and exit points but as a whole using information on all network user’s inputs and off-takes;
- final imbalances at the end of the day are financially settled by the TSO which stimulates network users to independently settle imbalances during the gas day;
- network users will be able to independently assess the financial risk level with respect to potential imbalances that they are ready to accept and thus arrange for necessary financial resources;
- trade notifications are introduced to allow effective gas trades at a virtual trading point;
- nominations are required only for border points and at connections with underground gas storages;
- the neutrality principle applies in settlements with the TSO, which means the TSO will not receive financial benefits or suffer financial losses while undertaking balancing actions.
These changes will allow creating a liquid daily gas market in Ukraine, which is commonplace in Europe, as well as to simplify and liberalise activities of gas market participants in Ukraine. At the same time, they will eliminate critical financial risks for the TSO.
Naftogaz has repeatedly stressed that efficient operation of the Ukrainian natural gas market is conditional on the implementation of the standard European legislation tested during many years in EU Member States.
Adoption of the new Gas Transmission System Code as proposed by Naftogaz represents an important step towards creating an effective domestic natural gas market in Ukraine, which is in the best interests of consumers.
You are welcome to send your comments and suggestions on Naftogaz’ proposal to [email protected]. Naftogaz encourages market participants to actively join the creation of a transparent high-quality document that will ensure implementation of the European gas market rules in Ukraine.