Ukrtransgaz is unable to pay for technological gas needs

Due to the shortage of funds, Ukrtransgaz is not able to timely pay off their gas procurement contracts for production and technological needs. The debt of Ukrtransgaz to suppliers for March-April procured technological gas was UAH 4.1 billion. As response, some suppliers refused to continue to transfer their volumes of gas under the current contracts.

The gas volumes for teсhnological needs, which were purchased under previous contracts, are sufficient to ensure the operation of the GTS only until June 24. This is stated on the official website of the company. With its alert letter, the GTS operator turned to the State Emergency Situations Service of Ukraine and notіfied on this extraodinary situation. Ukrtransgaz is urging NKREKP [National Commission for State Regulation of Energy and Public Utilities-Ed.] to immediately address the situation.

The company initiated negotiations with creditors, including NJSC Naftogaz of Ukraine as to debt restructuring. The situation has even been brought to attention of the National Security and Defense Council of Ukraine. The deteriorated financial standing of the nation's GTS operator, first and foremost, were caused by the economically unreasonable temporary tariffs, which were introduced by the NKREKP at the end of 2018. Secondly come unresolved issues of unauthorized gas pump-outs from the nation's gas transmission system, that led to UAH 35 billion debt to Ukrtransgaz cumulatively being owed by market operators for the balancing services rendered by Ukrtransgaz over 2016 until February 2019. Nearly 91% of the Ukrtransgaz’ debt stems from chronic indebtedness by Oblgases [regional gas distribution companies-Ed.].

After the launch of daily balancing in the Ukrainian natural gas market on March 1, 2019, the situation did not change significantly: gas distribution operators, mostly affiliated with RGC, kept on illicit gas pump outs from the nation’s GTS main pipelines, taking both technological and commodity gas for their needs, but not paying for it in full. Thus, over March to April 2019, RGC’s gas distribution affiliations increased their indebtedness by additional UAH 2.5 billion

16:30 / 14 June, 2019

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