GTSOU from today will balance GTS on the exchange. Prices for imbalances will also be formed at the UEEX

From January 19, 2022, GTS Operator of Ukraine LLC begins to perform balancing actions by buying and selling short-term standardized products at Ukrainian Energy Exchange LLC (UEEX LLC).

The National Commission for State Regulation of the Energy Sectors (NEURC) agreed to use information on transactions occurring on the trading platform of UEEX LLC in order to determine the marginal selling price, the marginal purchase price and the weighted average price by the gas transmission system operator. Accordingly, the marginal sale and purchase price will be determined in accordance with paragraph 9 of Chapter 6 of Section XIV of the Gas Transmission System Code.

European practice suggests that trading short-term standardized products on the exchange is the main method for balancing GTS, and the purchase of balancing services is used by TSOs as an auxiliary mechanism. Short-term standardized products (SSP) are understood as a certain volume of natural gas that is sold and bought on the trading platform during the gas day on which gas is transferred – within day SSP or the day preceding the gas day on which gas is transferred - SSP "day-ahead” seven days a week in accordance with the Rules, Regulations and the Code of the gas transmission system. The transfer of natural gas through the SSP is carried out in the VTT by submitting trade notifications to the GTS operator.

“This is a very important and highly anticipated step not only for the daily balancing market, but also a great chance for the entire Ukrainian natural gas market to earn in accordance with the European model and create its own price indicators. Since March 2019, when the daily balancing market started operating in Ukraine, market participants have been expressing their dissatisfaction with the method of setting marginal prices and appealing to the need to balance GTS on the exchange. Now we expect similar steps from market participants. Because it is they who now, one might say, are "providers of the balancing service."

As for the level of marginal prices, they are guaranteed to remain stimulating not to create imbalances in the GTS. We have developed mechanisms for calculating the weighted average price of short-term standardized products per gas day, which will not allow price manipulation to influence marginal prices, but at the same time will allow us to form real market price indicators on the Ukrainian gas market.

UEEX appeals to all customers of transmission services to join exchange trading on the UEEX short-term natural gas market”.» - commented on Inna Shcherbyna, Deputy Chairman of the UEEX Exchange Committee.

Recall,
On June 4, 2021, the GTS operator of Ukraine has decided on a service provider for organizing exchange trading in natural gas for its own needs. According to the results of the procurement procedure, it became Ukrainian Energy Exchange LLC.

Last week, Naftogaz of Ukraine announced that it would not participate in a new tender for the purchase of balancing services by GTS Operator of Ukraine LLC for 2022. The current contract between OGTSU and Naftogaz ended on January 19, 2022.