Gas transportation in Ukraine: how to organize the process?

The concept of energy and its use, sale or purchase has long ceased to be new in modern society. Today we will talk about the energy sector such as natural gas transportation. Such business can be profitable and promising, especially in Ukraine, where there is no shortage of natural resources.

But before you invest money in a “new” business, we advise you to first make head of the procedure of entering and becoming a member of the gas transportation system, because if you have only one license, you will not be able to operate in the market. For this purpose, you need to become a member of the gas market, and we will now explain in detail how to do it.

Procedure of entering the market for gas transporters: Steps and features

Strep 1. Obtaining the EIC code.

In order to start your business activity, you need to get an EIC code. This code for the market members can be compared with the ID code of the taxpayer. This also explains its purpose.

Please note! Each natural gas market player can obtain only 1 EIC code.

In order to obtain an EIC code, it is necessary to apply to the Gas Transmission System Operator for an X type EIC code.

The application form must be signed by an authorized representative and bear the seal of the applying company.

Read more about the EIC code here.

Step 2. Conclusion of an agreement with a GTS operator.

One of the most important stages to get the opportunity to transport gas is the conclusion of the transportation agreement with the GTS Operator of Ukraine.

This stage is not only important, but also certainly difficult. If it is necessary to make 1 step to obtain the EIC code, then at this stage you should know that in addition to several applications for the conclusion of the agreement, it will be necessary to collect a certain package of documents and, what is of particular importance, to properly draw up them, sign and certify.

Our lawyers have repeatedly undergone this procedure and can provide you with instructions for the implementation of this step or to take on the conclusion of the agreement with the GTS, depending on the package of services you choose.

Step 3. Connection to the information platform for gas transportation.

What is an information platform and why is it needed? It is an electronic platform of the GTS Operator, created as a web application on the Internet, which is designed to ensure communication between market participants, to download documents and to get official answers.

Without registration on this information platform, that is, without connection to it - the step 2, namely, the conclusion of the agreement with the GTS operator, will be incomplete. As this is the platform that allows business entities to perform their activities and check the information.

On this platform, a gas market participant can, for example, review their own data, current gas prices, monitor suppliers and information about consumers for disconnection. The important thing is that you can order capacities on the platform, as well as submit nominations and see the allocations.

Interesting! Nomination is preliminary notification submitted by the customer of the transportation services to the gas transmission system operator regarding the volumes of natural gas to be supplied to them.

Allocation is a confirmation of the actual volume of natural gas supplied to gas storage facilities by the customer within a certain period of time.

Step 4. Obtaining a shipper code (optional)

A shipper code is a notation consisting of symbols that shows a resource being transported via a gas pipeline.

Who might need it? For example, those customers who plan to import, export, transit or store gas in a gas storage facility in the “customs warehouse” mode, i.e. to operate on interstate connections.

In order to obtain it, you’ll need:

• A letter of application for the shipper code
• The form for registering the shipper pair.

Step 5. Booking and payment for gas transportation capacity

Booking of capacity is made by concluding an additional agreement by and between the supplier and the customer of transportation services. Booking can be made per year, quarter or month.

Sometimes it is necessary to make a booking per day - this can be made when submitting a nomination, for interstate points - nomination / denomination.

Payment for capacities is made in accordance with the templates, which shall specify the purpose of payment and the period of the agreement.

For example:

Payment code: XXX - service type, MM - month number from 01 to 12 YY - a two-digit year number from 19 to 99 Period: YEAR, QUARTER, MONTH, DAY.

Step 6. Connection to the operator of gas storage facilities / obtaining the “customs warehouse” service.

The necessary stage for an entity that intends to transport natural gas through the territory of Ukraine and not only, is connection to the operator of gas storage facilities.

Customs warehouse service is the storage of natural gas on the territory of Ukraine in underground storage facilities without customs clearance. In other words, this gas will not be subject to taxes and fees for 1095 days. And in the future, natural gas will be transported as intended.

For such a connection it will also be necessary to gather a package of documents, correctly draw it up and certify. And after preparation, you must submit this package of documents, including the application for signing the storage connection agreement with the GSO and the signed gas storage agreement, to the UGS operator (underground gas storage operator).

Please note! You can connect to the GTS operator and the UGS operator simultaneously.

Our lawyers can plan the whole procedure out in such a way as to meet the optimal deadlines for you.

If you want to transport gas and need qualified legal assistance to start a business, don’t hesitate to contact us! We have been obtaining licenses for gas and electricity since the launch of gas and energy markets in Ukraine.

Read more about the Gas Supply License here.