GTS operator actively develops new products and services
Since January, Gas TSO of Ukraine LLC (GTSOU) has not only been separated from Naftogaz but has also launched a new short-haul service. Its essence is that European energy companies can reserve the capacity of the Ukrainian GTS for a “short” gas transit from one country to another.
A short-haul product became legally possible after the changes made by the NCSREPU to a number of codes and regulations as well as the approval of relevant tariffs. However, the Ukrainian operator was able to implement it de facto after the signing of new transit agreements with Gazprom and new agreements with the GTS operators of neighbouring EU states.
For the first time on 16 March, Ukraine made gas transit from Hungary to Slovakia as ordered by one of the German traders. According to the operator, the advantage of short-haul through the Ukrainian GTS is lower prices: for example, gas transit from Poland to Hungary will be 27% cheaper than through the Czech Republic and Slovakia.
Thus, GTSOU begins to take an active part in the European gas market. The development of short-haul services and a “customs warehouse” will increase the volume of gas trade with the EU, and if traders decide to sell gas in Ukraine, it will increase liquidity and competition in the domestic market. All gas consumers will benefit from it.
The provision of new services will increase GTSOU’s revenues in future, and free capacities of the Ukrainian GTS will be required especially in view of a decrease in Gazprom’s transit volumes.
The authority of a new operator depends on the development of its portfolio of services and meeting the requirements of network codes. In this case, more and more European traders will begin to understand that the Ukrainian GTS is not only a “pipe” from Russia to Europe but also a flexible tool for gas transportation and storage.
In the long run, new routes and the added flexibility of the GTS of Ukraine will allow optimizing the operation of the GTS and enhancing energy security in Eastern Europe. Unfortunately, this will be counteracted by Russia, which is not interested in any alternatives to bypass “flows”. It is possible that information attacks by the aggressor country will continue. So, the GTSOU will need to confirm its reliability on a permanent basis.
DiXi Group External Analyst