Ukrtransgaz transports gas through pipelines to consumers in Ukraine, the EU, the Balkan countries and Turkey. The Ukrainian gas transmission system (GTS) is one of the most reliable and powerful in Europe. Its input capacity is 302.1 bcm per year, including 23 bcm per year from the EU, and output capacity is 178.5 bcm per year, including 146 bcm per year towards the EU and Turkey.
To ensure safe natural gas transmission to Ukrainian and European consumers, Ukrtransgaz cooperates with GTS operators in neighboring countries and with major energy companies including PGNiG (Poland), Gaz System SA (Poland), Eustream a. s. (Slovakia), FGSZ (Hungary), JSC "Moldovagaz" (Moldova), SNTGN Transgaz S.A. Medias (Romania), OJSC "Gazprom" (Russian Federation), OJSC "Gazprom Transgaz Belarus" (Belarus), E.ON (Germany), RWE (Germany), Engie (France), Net4Gas (Czech Republic), Bulharhaz EAD (Bulgaria), DESFA (Greece), Botas (Turkey) and others.
Gas underground storage management
Given the fact that Ukraine stopped gas imports from Russia in November 2015, the year 2016 was the first when Ukraine did not use Russian gas while preparing for the heating season, instead refilling its underground storage facilities with gas acquired in reverse flow from Europe. As a result, the country started the heating season with gas reserves of 14.7 bcm, which is about 2 bcm less than in the previous two years.
This sparked expressions of "concern" from the Russian side regarding "insufficient gas levels in" of Ukrainian underground storage facilities. However, due to proper planning and forecasting, Naftogaz managed to pass the heating season while ensuring the security and continuity of gas supplies to Ukrainian consumers and uninterrupted gas transit to European countries. During the 2016-17 heating season, 6.7 bcm of natural gas was withdrawn from storage facilities, which is 21% less than the same period the previous year. In the first quarter of 2017, 3.9 bcm of natural gas was withdrawn from the UGS, which is 1.6 bcm less than the previous year and can be attributed to increased gas imports from EU countries. Since March 2017, natural gas supplies are rising at the storage facilities with more than 150 mcm accumulated by early April.
According to the Naftogaz Restructuring Plan, the UGS are subject to comprehensive analysis with the assistance of international experts that will include legal, economic and technical evaluation to determine the most efficient operational management model. Based on the results of this analysis, an action plan will be developed and submitted to the Secretariat of the Energy Community to ensure efficient operation and management. According to the restructuring plan, it is scheduled for completion by July 2017.
Tariffs for the transportation of gas to Ukrainian consumers
The National Energy and Utilities Regulatory Commission set tariff rates for transporting gas to Ukrainian consumers at UAH 236.7 per 1000 cubic meters (excluding VAT) from 1 January to 31 March 2016 and from 1 April reduced this rate to UAH 219. At the GTS entry points located on the state border of Ukraine, the rate is USD 12.47 (excluding VAT).
The tariff for pumping, storage, and withdrawal of gas has remained at the level of 2013 and is UAH 112 per 1,000 cubic meters without VAT.
Cancellation of the purchase of equipment for compressor station reconstruction in 2016
Because of the risks posed buy the implementation of the Turkish Stream project, at the end of 2016 the board of Naftogaz rejected to agree on the purchase by Ukrtransgaz of equipment and works from JSC Sumy Machine Building Research and Production Association for the reconstruction of compressor stations Ananiev, Zadneprovski and Pivdennobuzka. The cost of this equipment was estimated at more than UAH 4 billion. The equipment Ukrtransgaz was going to purchase was based on a feasibility study and was intended for reconstruction of compressor stations involved in transmitting gas towards Turkey. It could not have been used for other compressor stations.
Given the agreement between Russia and Turkey on the Turkish Stream project, which aims to replace Russian gas transit through Ukraine to Turkey, this investment was deemed inappropriate. The Naftogaz recommendation to the Board of Ukrtransgaz is to purchase universal equipment and related works for the reconstruction of compressor stations that transmit gas in different directions and avoid becoming dependent on equipment produced by specific manufacturer.
Targets for 2017:
• increase the company's efficiency and transparency and integrate into the European Network of Transmission System Operators for Gas (ENTSOG);
• implement energy saving technologies under the energy efficiency program for 2017 and the energy resources saving plan for 2017.