The next phase of unbundling: a month to test the work of the independent gas transmission operator of Ukraine

June, 4, 2019 – Kyiv – The next stage of the Ukrainian gas transmission system unbundling is begun starting from June 1. The technical function that was previously performed separately by five branches of JSC "Ukrtransgas» transferred into the one unified unit to the branch "TSO of Ukraine". Thus, a prototype of the future independent TSO is created and more than 12 thousand employees directly involved in the process of gas transportation is transferred to the Branch.

One of the fundamental changes is the simplification of the management structure, which will increase the responsibility of local managers and accelerates decision-making processes. The business processes of the company are substantially reorganized to improve the efficiency of its work and bring it in line with international management practices.

The goal of this stage of unbundling is to test the work of the future independent operator as one single structure, including existing management and technological processes and to eliminate possible differences and gaps.

"We are maximally close to our goal – the creation of the independent gas transmission operator of Ukraine. Starting from July, all units involved in the gas transportation will be united "under one roof". We were carefully preparing for this step and created a fundamentally new, simplified, and flexible organization structure with the best international standards. In addition to this, we built the best team, and got the support from the leading European experts. I am confident that soon all our efforts will enable us to join the family of the European gas transmission system operators", said Pawel Stanczak, General Director of the "TSO of Ukraine" branch.

The work of the TSO in the Branch of "Ukrtransgaz" JSC will continue until the beginning of July. Since July 1, the next round of unbundling kicks off and will last until the end of 2019. During the next stage, the technical function will be transferred to the "Gas Transmission System Operator of Ukraine" LLC, a separate legal entity, 100% of which are founded by "Ukrtransgaz" JSC. All employees involved in gas transportation will also be transferred to the "Gas Transmission System Operator of Ukraine" LLC. Interaction between the two companies regulated by the maintenance contract (SLA).

Thus, in the second half of 2019 the gas transmission system operator of Ukraine will already function as a separate legal entity within the Naftogaz Group. From January 1, 2020, after the end of the transit contract with Gazprom, "Gas Transmission System Operator of Ukraine" LLC will be removed entirely from the Narftogaz Group structure, which will be the final step in gas transmission function unbundling.