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Natural Gas Supply in Ukraine


Natural Gas Supply

According to the Law of Ukraine "About Market of Natural Gas", the parties of the natural gas market are:
  - operator of the gas transmission system (OTS);
  - operator of the gas distribution system (ODS);
  - gas storage operator (ПСГ);
  - installation operator LNG;
  - Wholesaler;
  - Wholesale Buyer;
  - Supplier;
  - Consumer.

Natural gas supply is a business activity which requires a license and consists of the natural gas selling directly to consumers based on contracts concluded with them.

Supplier is a business entity which acts based on the license for the natural gas supply.

Модель поставки природного газу в Україні

Requirements to Suppliers of the Natural Gas in Ukraine

According to the legislation, the supplier of natural gas has a right to carry out its activity throughout the territory of Ukraine and to sign agreements for the gas supply with all categories of consumers. Providing activities related to the natural gas supply requires the qualification requirements fulfillment determined by the legislation. To qualify as a natural gas supplier, you need:

  1. Obtain a license for natural gas supply from NERC.
  2. Obtain a personal EIC-code from OTS Operator.
  3. To have a qualified staff.
  4. Maintenance your corporate website, corporate e-mail, phone.
  5. To sign agreement for the natural gas transportation with OTS. 
  6. To sign agreement for the natural gas storage with ПСГ Operator.
  7. To sign a sale agreement with the owner of the natural gas resource.
  8. Create an insurance reserve of the natural gas in accordance with the legislation requirements.
  9. To sign a delivery agreement with the consumer.

 

The Energy Company "Ukrenergoexport" meets all formal requirements of the Ukrainian legislation to this type of activity:

  1. Has a license of NERC #Х07762 which allows to supply a gas to any consumer (including the population) on the territory of Ukraine.
  2. Received EIC-code: 23X--120828UEL-O.
  3. Has active sales agreements with the natural gas producers and importers, agreement for the natural gas transportation with OTS (JCS "Ukrtransgaz").

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Assessment of the Economic Feasibility for the Supplier Changing

Опитувальний листFor the assessment of the economic feasibility from the natural gas purchase in the Energy Company "Ukrenergoexport", you have to send us completed questionnaire.

When a decision is made to switch to a new supplier, it is necessary to take into account the fact that the agreement for the natural gas supply should be signed in the expected amount of natural gas consumption required by the consumer or at its separate point of commercial accounting which has been assigned a separate EIC code and also for the term aliquoted to the billing period (gas month) as was determined in the agreement for the natural gas supply.

 

 

 

 

 

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Requirements to Consumers of the Natural Gas

Natural gas consumers for the agreement signing of the gas supply have to meet the following main criterias:

  • Consumer (the object of which is connected to the gas transmission or gas distribution system)  should have an appropriate agreement with OTS or ODS:
    - of the agreement for the natural gas transportation enclosed between the consumer on a direct pipe and the ODS;
    - of the agreement for the natural gas distribution signed between the consumer and the ODS.
  • Consumer as a party of the natural gas market should obtain a personal EIC-code from:
    - OTS, the consumer on a direct pipe ;
    - ODS, the consumer is connected to the gas distribution system.
  • The absence of the consumer's debts for the supplied natural gas before the operating supplier (if any), and it should be confirmed in a written from by the current supplier or based on the act of reconciliation between them.
  •  

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Rights and Obligations of the Supplier and Consumer of the Gas

Supplier has a right:
- to sign an agreement for the natural gas supply with any consumer and, in case of the absence of consumer's overdue debts for the natural gas before the operating supplier, to supply natural gas to the consumer in the period following the period of the natural gas supply by the operating supplier;

- timely to receive payment from the consumer for the natural gas in accordance with the terms of the agreement;
- for the unimpeded access (upon of a service certificate prsentation) to commercial gas metering units installed on consumer's objects for the purpose of data reconciliation on actual consumption of the natural gas;
- for full and reliable information from the consumer with whom was signed the agreement on regimes of natural gas consumption;

- to initiate the procedure for terminating (limiting) of the natural gas supply to the consumer in accordance with the terms of the agreement on the natural gas supply and in accordance with the requirements of the Rules for the Natural Gas Supply;
- for the other, given by the Rules for the Natural Gas Supply and current legislation.

 

Consumer has a right:
- to receive the natural gas in volumes determined by the agreement for the natural gas supply in case of adhere of its conditions;
- for the on concurrent conclusion of several agreements for the natural gas supply in case if the annual volume of the natural gas consumption exceeds 30 million cubic meters;
- to receive an information on free of charge basis about the supplier prices for natural gas and about the payment process;
- independently stop (limit) the selection of the natural gas for own needs in case of adhere of the current legislation requirements. Consumer has to notify all natural gas market parties in a written form with whom were signed the relevant agreements;
- to demand the resumption of the natural gas supply in accordance with the established procedure after elimination of violations and after compensation of the payment for disconnection and connection in case if the termination of gas supply occurred without termination of the agreement for the natural gas supply;

- for the other, given by the Rules for the Natural Gas Supply and current legislation.

 

 

Supplier is obligated to:
- adhere to the requirements of the Rules for the Natural Gas Supply;
- to ensure the natural gas supply under the conditions and in volumes determined by the agreement for the natural gas supply in case of adhere by the consumer with the discipline of natural gas selection and payment for it;
- to ensure submission of all necessary documents for confirmation by TSO about the necessary natural gas volumes in case if the consumer has fulfilled all obligations to the supplier for the ordering of the natural gas volumes which are required by the consumer;

- to consider consumer inquiries regarding activities related to the natural gas supply in accordance with the established procedure;
- timely and in accurate manner to provide consumer with the information, including also the stipulated by the  Law of Ukraine " About the peculiarities of access to the information in areas of the elictricity supply, natural gas supply, heat supply, centralized supply of a hot water, centralized supply of a drinking water and drainage",as well as data on actual charges (volume and value) for gas services to enable the consumer to regulate their own natural gas consumption;

- timely to notify the consumer in case if the supplier is in the process of liquidation or bankruptcy, or if the supplier is in the process of suspending / canceling the license for the natural gas supply and about the lack of natural gas resource;
- adhere to the minimum standards and requirements of quality for services provided to the natural gas consumers;
- under the natural gas supply agreement, consumer should be offered a choice of payment methods for supplied and consumed natural gas, including bank payment service, online transfer, postal transfer, cash transfer to the supplier's account at the cash desk and / or other methods, which should be fair, transparent and non-discriminatory in relation to consumers; 
- to create contact points for the information providing to consumers. The contact details and work schedule of each contact point should be provided in the agreement for the natural gas supply and on the supplier's website in the Internet;
- to provide the consumer with a final financial statement (invoice) after the supplier changing or the agreement termination  for natural gas supply not later than six weeks after such kind of changing or agreement termination;
- to perform other duties given by the Rules of the Natural Gas Supply and current legislation.

 

Consumer is obligated to::
- adhere to the requirements of the Rules for the Natural Gas Supply;
- to ensure the following of the discipline for the selection (consumption) of natural gas in volumes and on the terms specified by the agreements;
- timely and in full manner to pay for supplied natural gas on terms specified in the contracts;
- to execute a complex of events directed on the preventing of the emergence of a threat to life or injury, damage to equipment and products, negative environmental effects, etc. in case of receiving notification about the termination (limitation) of the natural gas supply (distribution / transportation);
- to ensure the permission of the supplier's representatives (upon presentation of a service certificate) to the territory of their own sites for reconciliation of the actual natural gas consumption;
- independently restrict (stop) the consumption of the natural gas in cases:
 -- violations of the payment terms according to the contract for the supply of natural gas;
 -- absence or insufficiency of the confirmed volume of natural gas allocated to the consumer;
 -- excess of daily portion and / or monthly confirmed volume of the natural gas without agreement with the supplier;
 -- the absence of the agreement for the natural gas supply;
 -- to perform other duties given by the Rules of the Natural Gas Supply and current legislation..

 Rights and Obligations of the Natural Gas Consumers Based on Understanding of the National Regulator (NERC).

 

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Procedure of Transition to the EC "Ukrenergoexport" for Gas Supply

Suppliers are prohibited from receiving fees or requiring any other financial compensation in connection with the supplier changing (except cases where such kind of payments or compensation are directly provided by the supply agreement with the consumer who is not concidered as "household consumer").

Any consumer who intends to change the supplier in the relevant billing period is obliged to fulfill his duties for the natural gas payments to the existing supplier and to sign an agreement about the cancellation of the contract for the natural gas delivery or its termination in connection with the natural gas supply from the date from which the natural gas supplywill be done by EC "Ukrenergoexport".

Consumer who meets the main criterias and who has made a decision to move to the EC "Ukrenergoexport" for gas supply has to perform the following procedural steps:

  1. To sign the Agreement for the Natural Gas with EC "Ukrenergoexport", for what should be provided:
    1. Statement about the Agreement Signing, in which should be indicated your personal EIC-code and expected volumes of natural gas for the period of validity of the contract;
    2. A properly certified copy of the document which defines the ownership or using of the consumer's object;
    3. Documents copies for the right to sign an Agreement certifying the status of a legal entity, an individual entrepreneur or a consumer and an authorized person for the agreement signing as well as a copy of the document about the record registration in the State Fiscal Service.
    4. Certificate (statement of settlement reconciliation) about the absence of consumer's overdue debts for the supplied gas to the active supplier signed by the active supplier (if any). 
  2. Terminate (or stop) the agreement for the natural gas supply with the operating supplier.

 

 

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Minimum Standards for Quality of the Provided Services

The State in the person of NERC issues a list of requirements to the standards of quality of the natural gas supply services, that are strictly adhered by the EC "Ukrenergoexport".
Information-report on the quality of the provided services for 2017 year.

 

 

Procedure for Disputes Reviewing

Disputes and differences that may arise in relation to the interpretation and usage of the  natural gas supply agreement  or in connection with it, or in other disputes which can arise in the result of interaction between EC "Ukrenergoexport" and consumer, will be solved through negotiations and consultations.

In case of situations when impossible to come an agreement during negotiations and consultations, EC "Ukrenergoexport" and the consumer have a right to submit a petition for the dispute resolution to the central office of the Regulator (NERC) or to it territorial subdivision, and in case of the impossibility of resolving the dispute in this way submit the dispute to the economic court of Ukraine.

Disputes adjustment by the Regulator or by it territorial subdivision should be done according to the procedure approved by the Regulator. An appeal to the Regulator or to it territorial subdivision does not deprive the consumer of a right to resolve the dispute in the economic court.

 

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Legislation of Ukraine and Regulatory Acts which Control Activities of the Natural Gas Supplier

The operating activity for the natural gas supply is regulated by the following regulatory documents in Ukraine

  1.   Law of Ukraine «About Market of the Natural Gas» #329-VIII from 09.04.2015
  2.   NERC Decree from 16.02.2017 #201  "About the Approval of Licensing conditions for Business Activities Conducting on the Market of Natural Gas"
  3.   NERC Decree from 30.09.2015 #2496 "About the Approval of Rules for the Natural Gas Supply", registered  in the Ministry of Justice of Ukraine on 06.11.2015  by #1382/27827
  4.   NERC Decree from 30.09.2015 #2500 "About the Approval of a Typical Agreement for the Naturall Gas Supply to domestic consumers", registered in the Ministry of Justice of Ukraine on 06.11.2015 by # 1386/27831
  5.   NERC Decree from 30.09.2015 # 2501 "About the Approval of a Typical Agreement for the Natural Gas Supply by "The Last Hope" Supplier", registered in the Ministry of Justice of Ukraine on 06.11.2015 by # 1387/27832
  6.   NERC Decree from 30.09.2015 #2493 "About the Approval of the Code of the Gas Transportation System", registered in the Ministry of Justice of Ukraine on 06.11.2015 by # 1378/27823
  7.   NERC Decree form 30.09.2015 #2494 "About the Approval of the Code of Gas Distribution Systems", registered in the Ministry of Justice of Ukraine on 06.11.2015 by # 1379/27824
  8.   NERC Decree from 30.09.2015 #2495 "About the Approval of the Code of Gas Storage and the Criteria According to which to a Certain Gas Storage a Contractual Access Regime or a Regulated Access Regime should be Applied", registered in the Ministry of Justice of Ukraine on 06.11.2015 by # 1380/27825
  9.   NERC Decree from 30.09.2015 #2497 «About the Approval of a Typical Agreement for the Natural Gas Transportation", registered in the Ministry of Justice of Ukraine on 06.11.2015 by # 1383/27828
  10.  NERC Decree from 30.09.2015 №2498 "About the Approval of a Typical Agreement on the Natural Gas Distribution", registered in the Ministry of Justice of Ukraine on 06.11.2015 by # 1384/27829
  11.  NERC Decree from 30.09.2015 № 2499 «About the Approval of a Typical Storage Aontract (injection, selection) of the Natural Gas», registered in the Ministry of Justice of Ukraine on 06.11.2015 by # 1385/27830
  12.  Order of the Ministry of Energy and Coal Industry of Ukraine from 15.05.2015 #285 «About the Approval of Safety Regulations for the Gas Supply Systems», registered in the Ministry of Justice of Ukraine on 08.06.2015 by # 674/27119
  13.  Resolution of the Cabinet of Ministers of Ukraine from 08.12.2006 #1687 "About the Approval of the Procedure per object termination (restriction) of gas supply to consumers, except to the population"

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