USAID helps the GTSOU to optimize Ukraine’s transmission system operations

November 1, 2023

On October 30, 2023, the USAID Energy Security Project (ESP) and the Gas Transmission System Operator of Ukraine (GTSOU) hosted the Roundtable “Ukraine Gas Transmission System Optimization.”

USAID ESP presented the outcomes of the “Ukraine Gas Transmission System Optimization” project, aimed at improving GTSOU’s readiness to respond to various gas operation scenarios, optimal decision-making, and planning.

The insights gained from the modeling process will allow the Gas Transmission System rightsizing, i.e., to operate most efficiently under various circumstances.

The “Ukraine Gas Transmission System Optimization” project covered both technical (assessment of simulated technical solutions) and economic (calculation of potential savings from the Gas Transmission System optimization) aspects.

The USAID ESP and Ukraine’s Gas Transmission System roundtable brought together key stakeholders, including members of the Ukrainian Parliament, the Ministry of Energy, the National Energy and Utilities Regulatory Commission, defense and security services, and the international community, including the International Monetary Fund.

According to the GTSOU’s management, Ukraine’s gas market faces a significant transformation in the coming years, which will have a considerable impact on Ukraine’s economy as a whole, pointing out that the “Ukraine Gas Transmission System Optimization” project assists the Operator in preparing for various scenarios, including complete stoppage of natural gas transit through the territory of Ukraine.

Kathleen Kirsh, Energy Team Lead of the Office of Economic Growth, USAID/Ukraine, emphasized USAID’s commitment to supporting the Ukrainian energy market, with a particular focus on the gas sector, to help the energy companies provide affordable, reliable, and secure energy to all Ukrainians, as well as Ukraine’s European partners.

According to USAID ESP Sector Lead Justin Goonesinghe, as a result of the impact Russia’s invasion has had on the natural gas market in Ukraine, the transit and internal gas transmission is constantly declining, leading to a significant excess of GTS capacities. The maintenance of these excess capacities diverts resources from investments and modernization, he pointed out. Reduction of gas transmission volumes demands not only optimization of the technical configuration of Ukraine’s gas transmission system but also improvement of the Operator’s business model in general.

The results of USAID ESP’s stress-test modeling scenarios confirmed the technical resilience of the Ukrainian gas storage and transmission infrastructure to fully support gas transmission during the forecasted 2023/2024 winter season.

In addition, USAID ESP Experts proposed some legislative changes empowering GTSOU on their decisions concerning underutilized assets, including amendments to the “Law of Ukraine on Oil and Gas” (draft law №6133) and modifications to the related secondary legislation.

To ensure an uninterrupted operation of Ukraine’s GTS during the upcoming 2023/2024 winter and strengthen Ukraine’s energy security, USAID ESP will continue to support GTSOU to implement European principles of the energy sector regulation, helping to ensure sustainable development of Ukrainian energy markets.