Ukrainian gas storage operator introduces the possibility of exchange trading of gas in UGS

Ukraine’s gas storage operator and the Ukrainian Energy Exchange signed an agreement on cooperation, which envisages providing customers of gas storage (injection, withdrawal) services with exchange standardized products for trading natural gas stored in Ukraine’s underground storage facilities. The new functionality will allow companies to speed up and optimize gas trading operations, increase their reliability and help improve the end result of trading by attracting a wider range of participants.

Cooperation between the Gas Storage facilities Operator and Ukrainian Energy Exchange will be implemented in two stages.

At the first stage, participants of the Ukrainian gas market will be able to carry out trade operations with cleared natural gas stored in storages through the platform of the Ukrainian Energy Exchange (hereinafter - the UEEX platform).

The new functionality will be available from the middle of March and will be relevant primarily for Ukrainian companies, which will be able to trade gas through the UEEX platform, significantly optimizing and reducing the time for actual trading. If previously the preparation of one such contract took up to two days, the exchange platform will make it possible to carry out such procedures within three hours. At the same time, the Gas Storage facilities Operator will guarantee the availability of the gas volume announced for trades at the UGS and ensure automation of its transfer from one trades participant to another within 30 minutes. After which, the exchange, in cooperation with the escrow account Bank, will automatically conduct clearing settlements.

At the second stage of implementation of the agreements between the UGS Operator and UEEX, the possibility to trade gas through the UEEX trading platform will be extended to clients that store gas in Ukrainian underground storages in the "customs warehouse" and "customs warehouse + Short haul" modes. Thus, the new functionality will also be available to non-resident companies that store their gas in Ukraine. This service is now at the stage of development and technical implementation and will become available to market participants tentatively from the end of April 2021.

The transition to exchange-based gas trading will contribute to the further liberalization of the Ukrainian energy market, increase its liquidity, and enhance the reliability and transparency of mechanisms for the sale/purchase/transfer of gas from one owner to another.

"Taking into account the fact that nowadays gas trading in Ukraine often takes place at the level of personal contacts, such a step can be considered a real breakthrough for our market. Now gas trading will become more transparent and reliable and more companies will be able to participate in it. And healthy competition always benefits the market. Ukraine will also benefit as an international level player: we will become even more interesting and convenient for our foreign customers", - mentioned acting CEO of Ukrtransgaz Serhiy Pereloma.

"The great potential of the natural gas market in Ukraine dictates the need for new, modern tools through which natural gas trade in UGS is activated. The development of natural gas trade in UGS expands the use of gas storage infrastructure, contributes to the development of the Ukrainian gas market and the creation of a national gas hub. We receive requests from market players for such a trading tool, which will ensure the formation of gas price indicators with the transmission point in UGS and could become a serious impetus for the development, including the short-term gas market in Ukraine", - mentioned Oleksii Dubovskyi, Chairman of the Exchange Committee.