4. Gas TSO of Ukraine – Branch and LLC. What is the difference?

Unbundling of the gas transmission system operator of Ukraine (Gas TSO of Ukraine) is one of the most complex and essential transformations in the gas industry of both countries: Ukraine and Europe. In addition to the complexity mentioned above factors, there is lack of experience in similar reforms in Ukraine, a disorder of legal framework and licensing conditions, the necessity to ensure uninterrupted gas transportation process, troubled relationships with the transit gas supplier – Gazprom.


Therefore, preparation for the final separation of the Gas TSO of Ukraine takes place in several stages and within two entities with one name “Gas TSO of Ukraine.” The first is the Branch - division of JSC Ukrtransgaz. The second is the separate legal entity with the LLC form of ownership founded by Ukrtransgaz. The work of the Branch is a transitional stage, which will be completed after the final formation of an independent Operator starting from 2020. 


Establishment of the Branch Gas TSO of Ukraine in December 2017 was the first organizational step towards unbundling. Technological and management processes were gradually delimited, which made it possible to create three separate areas of activity of Ukrtransgaz – gas transportation, storage and maintenance of GTS (repairs, construction of new facilities, etc.). How it happened, we have already told in previous posts.


From July 1, 2019, the process of natural gas transportation through main gas pipelines was divided between two Operators – Branch and LLC. In the second half of 2019 until the final separation of the Operator...


… Branch Gas TSO of Ukraine:

  • coordinates the process of natural gas transportation;
  • as a part of JSC Ukrtransgaz is a licensee for natural gas transportation (within Ukraine) and transit (from Russia to EU);
  • is responsible for relationships with gas suppliers;
  • concentrates several functions, namely - commercial activity, dispatching, procurement.


… LLC Gas TSO of Ukraine:

  • Does the technological process of natural gas transportation in the volumes determined by the Branch Gas TSO of Ukraine. The company employs more than 9000 qualified workers, who have worked at JSC Ukrtransgaz until July 1, 2019; 
  • is responsible for timely repair and service works, including preparation of GTS for the heating season 2019/2020
  • creates the basis for the independent work of the Operator, in particular, the certification by the NEURC.


The interaction between two Operators is based on the SLA.