On 10-th of March, Gas Transmission System Operator of Ukraine LLC received accreditation at the Ukrainian Energy Exchange for participation in electronic exchange trading in natural gas. This step was made in the direction of joint work to create a competitive natural gas market in accordance with European standards.
The daily natural gas balancing market has been operating in Ukraine for a year already, but no economic incentives have been created to motivate market participants to balance their portfolios independently without the GTS Operator settling. EU Regulation No. 312 and the GTS Code provides for the operation of the exchange’s trading platform, which is integrated with the information platform of the GTS operator and where market participants sell and buy gas during the gas days to settle their daily imbalances. The GTS Operator should also act as a participant in such trades in order to ensure high market liquidity and formation of market prices, which will be the basis for calculating the daily imbalance fee (margin prices).
The only regulatory barrier separating the Ukrainian gas market from the European market model remains legislative restrictions on GTS operator purchases. The Ukrainian Energy Exchange supports the adoption of draft law No. 3176 on amendments to the Law of Ukraine "On Public Procurement" for the purchase of natural gas, which will allow the GTS operator to meet the requirements of the GTS Code and to purchase gas for balancing needs on the exchange. This draft Law is also supported by the GTS Operator, as reported on its page. There are every reason to hope that joint steps of the Verkhovna Rada, NKREKP, GTS Operator and the exchange will soon allow to launch a full operation of the daily balancing market.