Summary of the dispute

The dispute concerned a series of amendments to the Gas Transmission Code (GTS Code) adopted by the National Energy and Utilities Regulatory Commission (NEURC). Seven problematic issues in the GTS Code represented the core of the dispute: Financial guarantees, Trade notifications, Transport service termination, Capacity allocation agreement, Balancing groups, Balancing neutrality and Unauthorized offtake of gas.

The first six issues enumerated above have been extensively discussed between the parties and the Secretariat during a series of meetings between June July 2018 and May February 2019. The solutions found and agreed upon were incorporated into the several Amendments to the GTS Code, and other relevant secondary acts, such as Standard transmission agreement and the Methodology on natural gas distribution tariffs. Ukraine’s gas transmission system started to be balanced on a daily basis as of 1 March 2019 and the new regime provided increased system efficiency, thus delivering benefits to Ukrainian energy consumers.

However, daily balancing in physical and commercial terms could not brought fulfilling the financial obligations in time and in full scope. Thus, the Unauthorized offtake of gas remained as unsolved issue and causing problems further. It has to be noted that solving of unauthorized offtake of gas is related to issues and activities outside the scope of the GTS Code (such as the public service obligation decree, which will expire in May 2020). This led to the decision by the Dispute Resolution and Negotiation Centre to close Dispute 2/2018, and to discuss the remaining issue, if not as a new case, in a different forum, with the appropriate stakeholders.

Dispute 2/2018 was mediated by Ms Karolina Čegir, Gas Expert in the Energy Community Secretariat.