Ukrainian Parliament allowed GTSOU to trade in natural gas for balancing settlements on energy exchanges

At its plenary session on December 2, 2020, the Parliament of Ukraine adopted in the second reading and as a whole the Draft Law No3176 On Amendments to the Law on Public Procurement, which now allows Gas TSO of Ukraine LLC operator (GTSOU) to trade in natural gas on the energy commodity exchanges and other e-trading platforms.

There were 300 MPs voted for the corresponding decision, with 18 MPs abstained, and 29 MPS not voting at all.

By adopting the Draft Law No3176, the Law on Public Procurement is amended, namely the Law will not apply either to the GTS Operator while performing the balancing actions, or the customer of natural gas transmission services in order to to balance its portfolio in accordance with the Law on the Natural Gas Market and the GTS Code. The law stipulates that a gas exchange, which is managing an e-trading platform in accordance with this Law must ensure compliance with the requirements established, including the GTS Code, for trading platforms.

“The Draft Law No3176 was developed in order to improve the current legislation and to create opportunities for the GTSOU as the main gas pipeline operator, to purchase short-term standardized natural gas nominations on an e-trading platform, i.e. an energy commodity exchange. The Draft Law No3176 is aimed at ensuring transparency, free access to information, and a larger number of participants in the natural gas market, "- said in an explanatory note to the Draft Law No3176.

"From now on, the GTSOU will also have the right to purchase gas for balancing purposes on energy commodity exchanges. According to international experience, it is the commodity exchange trades of gas transmission system operators were a precondition for the development of a competitive environment and the formation of market prices for natural gas, ”the GTSOU said.