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Ukrtransgaz Appealed to the Energy Community in a Dispute with NEURC Concerning the issue of bringing the GTS Code in Compliance with the Rules of the European Energy Legislation

Ukrtransgaz appealed to the Dispute Settlement and Mediation Centre at the Energy Community Secretariat to mediate with the NEURC in order to bring the GTS Code in line with the rules and practices of the EU natural gas market (see letter dated 26.06.2018). On June 27, the Centre appointed Mr. Predrag Gržičić, Head of the Secretariat of the Gas Energy Community, mediator in the dispute.


The procedure for settling the dispute between the Regulator and the participants in the natural gas market with the involvement of the Centre for Dispute Settlement and Mediation is provided for by Act of the Energy Community Secretariat of 2016/3 / ECS. Ukrtransgaz took advantage of the opportunity because the NEURC, despite numerous calls from the GTS Operator, refused to consider changes to the GTS Code and continues to insist on the introduction of its current version as of August 1, 2018.


It should be recalled that the main shortcomings of the Code, which require immediate elimination are as follows:

•       the substitution of notions of "balancing service" and "unauthorized extraction" (theft) of the GTS operator's resource, which leads to large-scale manipulation and real theft of such a resource;

•       retrospective approach to the definition of financial provision by the GTS Operator without taking into account projected volumes of consumption;

•       the prohibition of a free capacities market at internal points of exit from the GTS, which is to provide operators of gas distribution networks with the exclusive right to acquire such capacities and remove other participants in the natural gas market;

•       lack of transparent and balanced tariff methodology of the Regulator.


Ukrtransgaz has repeatedly publicly stated that the version of the GTS Code, recently developed and adopted by the NEURC, does not comply with European energy legislation and carries significant risks not only for the GTS Operator, but also for the existence of the gas market as a whole.


We hope that as a result of collaboration of all parties, amendments will be made to the GTS Code, which will enable Ukraine to switch successfully to the daily balancing of the gas market in accordance with European legislation. 


About the Energy Community:

The Energy Community is an international organization that unites the European Union and neighbouring countries to create an integrated Europe-wide energy market. The organization was founded on the basis of the Treaty signed in October 2005 in Athens (Greece), and has been in operation since July 2006. The main objective of the Energy Community is to promote the rules and principles of the EU internal energy market for the countries of Southeast Europe, the Black Sea region and beyond. The main mission of the organization is to create a regulatory and market structure, and to enhance safety of supply.