RESOLUTION OF THE CABINET OF MINISTERS OF UKRAINE

of October 1, 2015 No. 758

About approval of the Regulations on assignment of special obligations on subjects of the natural gas market for providing public concerns in the course of functioning of the natural gas market (the relation during transition period)

List of amending documents

According to article 11 of the Law of Ukraine "About the natural gas market" the Cabinet of Ministers of Ukraine decides:

1. Approve Regulations on assignment of special obligations on subjects of the natural gas market for providing public concerns in the course of functioning of the natural gas market (the relation during transition period) which is applied.

2. Determine that in case of change of factors which significantly influence the level of the regulated retail prices on natural gas determined by the Regulations on assignment of special obligations on subjects of the natural gas market for providing public concerns in the course of functioning of the natural gas market (the relation during transition period) approved by Item 1 of this resolution specified retail prices can quarterly be reviewed.

3. Take into consideration that acts of the Cabinet of Ministers of Ukraine are applied in the part which is not contradicting this resolution.

4. To the Ministry of Energy and Coal Industry till May 1, 2016 to develop and submit to the Cabinet of Ministers of Ukraine the draft of the resolution on introduction of amendments to acts of the Cabinet of Ministers of Ukraine for the purpose of their approval of this resolution.

5. This resolution becomes effective since October 1, 2015 and is effective till April 1, 2017.

Approved by the Resolution of the Cabinet of Ministers of Ukraine of October 1, 2015 No. 758

Regulations on assignment of special obligations on subjects of the natural gas market for providing public concerns in the course of functioning of the natural gas market (the relation during transition period)

1. This Provision determines amount and conditions of accomplishment of the special obligations assigned to subjects of the natural gas market for providing public concerns in the natural gas market (further - special obligations), including for ensuring stability, proper quality and availability of natural gas, and also for maintenance of proper level of safety of supply of natural gas to consumers, without creating threat of the first-priority purpose of creation of the full-fledged natural gas market based on the principles of free competition and to observance of pro-rata rules, transparency and nondiscrimination.

This Provision:

it is applied by transparent and non-discriminatory method and shall not limit the rights of the subjects of managing created according to the legislation of other states parties of Energy Community, in particular the rights to implementation of supply of natural gas to consumers on condition of observance of requirements of the legislation;

does not deprive of residential customers and producers of heat energy of the right to choose the supplier of natural gas and the right to acquire natural gas at the prices which are freely established by agreement parties of supply of natural gas as it is provided by the Law of Ukraine "About the natural gas market";

does not deprive of suppliers of natural gas of the right to freely elect the wholesale seller of natural gas for needs of their economic activity.

2. In this Provision the following basic concepts are used:

gas year - period of time which begins since October 1 of the previous calendar year and proceeds till September 30 (inclusive) the current calendar year;

gas half-year - period of time which begins since October 1 of the previous calendar year and proceeds till March 31 (inclusive) the current calendar year and since April 1 of the current calendar year and proceeds till September 30 (inclusive) the current calendar year.

Other terms are used in the value given in the Law of Ukraine "About the natural gas market".

3. This Provision assigns the following obligations:

1) the obligation of economic society, 100 percent of shares (shares, shares) which belong to the state or other economic society which single shareholder is the state (PJSC Ukrgazdobycha), to sell natural gas to economic society which single shareholder is the state and which has the signed purchase and sale agreements of natural gas with foreign wholesale sellers (National joint stock company "Naftogaz of Ukraine" (further - NAK Naftogaz Ukrainy), and obligation of NAK Naftogaz Ukrainy to acquire such natural gas for forming of natural gas resource for residential customers, the religious organizations (except amounts, used for production of their production business activity) and producers of heat energy within production of heat energy for the religious organizations and provision of services for heating and supply of hot water to the population (further - producers of heat energy) in amount, at the prices on conditions and according to the procedure, determined by Items 5-8 of this provision;

2) obligation of NAK Naftogaz Ukrainy to sell natural gas to suppliers of natural gas for needs of residential customers and the religious organizations (except the amounts used for production of their production business activity) at the prices on conditions and according to the procedure, determined by Items 9 and 10 of this provision;

3) obligation of suppliers of natural gas to deliver natural gas to residential customers and the religious organizations (except the amounts used for production of their production business activity) at the prices on conditions and according to the procedure, determined by Items 11-14 of this provision;

4) obligation of NAK Naftogaz Ukrainy to deliver natural gas to producers of heat energy for production of heat energy at the prices on conditions and according to the procedure, determined by Items 15-17 of this provision;

5) obligation of NAK Naftogaz Ukrainy to deliver natural gas of JSC Odessa Port Plant on conditions and according to the procedure, determined by Item 17-1 of this provision.

4. The obligation provided:

the subitem 2 Items 3 this provision, are not applied to the residential customers and the religious organizations (except the amounts used for production of their production business activity) living / are located in temporarily occupied territory of Ukraine;

the subitem 3 Items 3 this provision, are not applied to activities for supply of natural gas to the residential customers and the religious organizations (except the amounts used for production of their production business activity) living / are located in temporarily occupied territory of Ukraine;

the subitem 4 Items 3 this provision, are not applied to activities for supply of natural gas to objects of gas usage of the producers of heat energy located in temporarily occupied territory of Ukraine.

5. JSC Ukrgazdobycha shall perform monthly till April 1, 2017 sale of natural gas of own production (except amounts of production and technological expenses, amounts which are used for ensuring own needs of JSC Ukrgazdobycha connected with production, preparation for transportation and transportation of natural gas, and also for liquefied natural gas production and stable gasoline) NAK Naftogaz Ukrainy for forming of natural gas resource for residential customers, the religious organizations (except the amounts used for production of their production business activity) and producers of heat energy according to this Provision at the prices on conditions and according to the procedure, determined by Items 6-8 of this provision.

The NAK Naftogaz Ukrainy shall acquire the gas extracted by JSC Ukrgazdobycha for forming of natural gas resource for residential customers, the religious organizations (except the amounts used for production of their production business activity) and producers of heat energy according to this Provision at the prices on conditions and according to the procedure which are determined by Items 6-8 of this Provision.

Other subjects of managing which perform activities for natural gas production including the agreement parties about joint activities imprisoned before entry into force of this provision have the right to voluntarily undertake the obligation provided by paragraph one of this Item. In that case the relevant standards of this Provision are applied to the specified subjects of managing.

The natural gas acquired according to paragraphs first and third this Item is used by NAK Naftogaz Ukrainy only for needs of residential customers, the religious organizations (except the amounts used for production of their production business activity) and producers of heat energy. The NAK Naftogaz Ukrainy has the right to perform operations of substitution between the imported natural gas and natural gas acquired according to paragraphs first and third this Item for the purpose of accounting of seasonal gaps between use and natural gas production.

6. HAK "Naftogaz of Ukraine" (inclusive) acquires from May 1, 2016 to March 31, 2017 natural gas according to paragraphs first and third Item 5 of this provision at the price determined at the level of 4849 hryvnias for 1000 cubic meters (excluding tax on value added).

In case of implementation of marginal review of retail price on natural gas for residential customers, the religious organizations (except the amounts used for implementation of production business activity), price levels on which HAK "Naftogaz of Ukraine" delivers natural gas to producers of heat energy for the purpose of provision of services on heating and supply of hot water to the organizations financed at the expense of state and local budgets, to the population and for production of heat energy for the religious organizations the price of acquisition of natural gas for forming of the natural gas resource for the specified consumers extracted PJSC Ukrgazdobycha is at the same time reviewed.

7. The NAK Naftogaz Ukrainy till November 1, 2015 (for heating season of 2015/16) and till August 15, 2016 (for heating season of 2016/17) constitutes the forecast of amount of the natural gas necessary for the next year for forming of natural gas resource for residential customers, the religious organizations (except the amounts used for production of their production business activity) and producers of heat energy according to this Provision.

Such forecast is brought to the attention of the Cabinet of Ministers of Ukraine, NKREKP, the Ministry of Energy and Coal Mining.

8. If the amount of natural gas necessary for NAK Naftogaz Ukrainy for forming of natural gas resource for residential customers, the religious organizations (except the amounts used for production of their production business activity) and producers of heat energy, exceeds the sales volume of natural gas subjects of managing, determined by paragraphs first and third Item 5 of this provision, the NAK Naftogaz Ukrainy acquires necessary amounts of natural gas at other wholesale sellers, including abroad.

9. The supplier of natural gas which signed the contract of delivery of natural gas with the residential customer or the religious organization (except the amounts used for production of its production business activity) and is supplier of such consumer, till April 1, 2017 has the right to submit NAK Naftogaz Ukrainy the purchasing request of natural gas in the amount necessary for it for delivery implementation for such consumer (further - the request of the supplier). In case of absence of metering station of natural gas at such consumer it is considered that the amount of natural gas determined according to consumption regulations which are established by the Cabinet of Ministers of Ukraine is necessary.

The NAK Naftogaz Ukrainy has no right to refuse satisfaction of the request of the supplier on condition of accomplishment by such supplier of requirements of article 11 of the Law of Ukraine "About the natural gas market" about opening of current accounts with the special mode of use.

10. Purchase and sale of natural gas between NAK Naftogaz Ukrainy and the supplier of natural gas with special obligations is performed at the regulated wholesale price calculated taking into account the formula determined by Item 12 of this provision according to the agreement which is signed based on the approximate purchase and sale agreement of natural gas between NAK Naftogaz Ukrainy and the supplier of natural gas with special obligations which affirms the Cabinet of Ministers of Ukraine.

The NAK Naftogaz Ukrainy shall direct till September 25, 2016 the written offer on the conclusion of the agreement provided by paragraph one of this Item, to the supplier of natural gas with special obligations.

11. Suppliers of natural gas till April 1 2017, buying natural gas from NAK Naftogaz Ukrainy according to Items 9 and 10 of this provision, shall deliver such gas to exclusively residential customers and the religious organizations (except the amounts used for production of their production business activity) at the price which cannot exceed marginal retail prices on natural gas.

The suppliers of natural gas determined in appendix 1, shall deliver natural gas to residential customers and the religious organizations (except the amounts used for production of their production business activity) which objects of gas consumption are located within the corresponding territory of licensed activities for distribution of natural gas, at the price which cannot exceed marginal retail prices on natural gas, and also according to the procedure and on the conditions provided by Items 11 and 12 of this provision by the time of change of supplier of natural gas.

The suppliers of natural gas determined in appendix 1, have no right to refuse to the residential customer and the religious organization (except the amounts used for production of its production business activity) which/which objects of gas consumption are located within the corresponding territory of licensed activities for distribution of natural gas, in the conclusion of the delivery agreement of natural gas on marginal retail price of natural gas if such consumer filed the corresponding petition to the supplier.

12. Retail prices on natural gas for residential customers and the religious organizations (except the amounts used for production of their production business activity) are calculated by the following formula:

12-1. In two months prior to the beginning of every half-year of gas year beginning on April 1 and on October 1 of the Ministry of Energy and Coal Mining carries out marginal recalculation of retail prices on natural gas for residential customers, the religious organizations (except the amounts used for implementation of production business activity).

By results of recalculation in case of variation of the received marginal values of retail prices on natural gas from acting more than for 10 percent the specified marginal retail prices on natural gas are published on the official site of the Ministry of Energy and Coal Mining in two months prior to their action since April 1 or on October 1 each gas half-year. In case of variation of the received marginal values of retail prices on natural gas from acting less than for 10 marginal percent retail prices are not reviewed.

Estimated marginal retail price on natural gas for residential customers for the purpose of respect for parity of the weighted wholesale price of gas to the price of gas import is estimated based on indicators of average monthly price values on gas on the German gas hub (NCG) taking into account transportation expenses to the western border of Ukraine and rate for entrance to gas-transport system of Ukraine in US dollars on average monthly rate dollar of the USA/euro "spot", listed in hryvnia on the official rate of National Bank for the second and third months of the current gas half-year taking into account rates for transportation and distribution of natural gas, the trade margin of the supplier of natural gas, the value added tax operating during recalculation.

The settlement period for calculation of marginal parity of retail price on natural gas for residential customers to the price of gas import is determined from effective date of the established marginal retail prices on natural gas for residential customers about one the month preceding settlement date during the first calculation, and further from the month preceding date of the last calculation to one the month preceding date of the following calculation. If marginal retail prices were not reviewed during the last settlement period, for further calculations the actions of such prices this for the entire period, but no more than in 12 months undertake.

Along with marginal adjustment of retail prices on natural gas for residential customers price levels on which HAK "Naftogaz of Ukraine" delivers natural gas to producers of heat energy for the purpose of provision of services on heating and supply of hot water to the organizations financed at the expense of state and local budgets, to the population and for production of heat energy for the religious organizations will be subject to adjustment.

13. From May 1, 2016 to March 31, 2017 (inclusive) marginal retail price affects natural gas for residential customers in the amount of 6, of the 879th hryvnia for 1 cubic meter.

13-1. From May 1, 2016 to March 31, 2017 (inclusive) marginal retail prices affect natural gas for the religious organizations (except the amounts used for production of production business activity) in the amount of 3, the 913th hryvnias for 1 cubic meter.

14. Supply of natural gas to residential customers is performed based on the standard agreement which affirms according to the legislation.

15. The producer of heat energy till April 1, 2017 has the right to acquire natural gas in NAK Naftogaz Ukrainy for production of heat energy and/or provision of services on heating and supply of hot water to the population, the religious organizations and organizations financed at the expense of state and local budgets provided that such producer on whom as of September 30, 2015 operation of article 19-1 - the Law of Ukraine "On heat supply" expatiated executed obligation on opening of accounts with the special mode of use.

16. The NAK Naftogaz Ukrainy during the period (inclusive) delivers from May 1, 2016 to March 31, 2017 natural gas to producers of heat energy at regulated price (without rates for transportation services and to distribution of natural gas, and also the taxes and fees included in the cost of natural gas according to the Tax code of Ukraine) for the purpose of provision of services on heating and supply of hot water to the organizations financed at the expense of state and local budgets and the population in the amount of 4942 hryvnias for 1000 cubic meters, and for production of heat energy for the religious organizations - in the amount of 2471 hryvnias for 1000 cubic meters.

17. Supply of natural gas of NAK Naftogaz Ukrainy to producers of heat energy is performed based on the agreement which considers provisions of the approximate delivery agreement of natural gas to producers of heat energy which affirms the Cabinet of Ministers of Ukraine, and with respect for the principle of nondiscrimination.

The obligation provided by the subitem 4 Items 3 this provision is assigned to NAK Naftogaz Ukrainy for the period till April 1, 2017 under following conditions:

the conclusions the producer of heat energy with NAK Naftogaz Ukrainy of the delivery agreement of natural gas according to the legislation;

absence at the producer of heat energy of debt to NAK Naftogaz Ukrainy for the used natural gas, or

absence at the producer of heat energy of debt (without penalties) before NAK Naftogaz Ukrainy for the natural gas consumed till January 1, 2016 under all delivery agreements of natural gas signed with NAK Naftogaz Ukrainy (purchase and sale, about purchase, right to claim concessions, etc.), and also implementation of the current calculations for the used natural gas, or

level of calculations of the producer of heat energy as of the 25th preceding month of supply of natural gas (without penalties), under all delivery agreements of natural gas signed with NAK Naftogaz Ukrainy (purchase and sale, about purchase, right to claim concessions, etc.) constitutes at least 90 percent, or

provisions of NAK Naftogaz Ukrainy and accomplishment by the producer of heat energy of the council of the debt repayment schedule approved by executive body (equal parts till January 1, 2021 with breakdown under all contracts with NAK Naftogaz Ukrainy) constituted based on the certificate of the debt provided to NAK Naftogaz Ukrainy and also implementation of the current calculations for the used natural gas. Availability of the debt repayment schedule does not change the procedure of payments established between the supplier and the producer of heat energy in delivery agreements of natural gas (purchase and sale, about purchase, right to claim concessions, etc.).

17-1. JSC Odessa Port Plant has the right till December 31, 2016 (inclusive) to buy natural gas for own economic activity in NAK Naftogaz Ukrainy on uninterrupted basis (irrespective of availability of debt to NAK Naftogaz Ukrainy for the consumed natural gas) in total amount to 300 million cubic meters for the specified period at the expense of resource of the imported natural gas of NAK Naftogaz Ukrainy, in particular, in the following cases:

the conclusions of JSC Odessa Port Plant with NAK Naftogaz Ukrainy of the delivery agreement of natural gas;

the natural gas price, the delivered JSC Odessa Port Plant, shall correspond to natural gas price, delivered to NAK Naftogaz Ukrainy of the same category of consumers on the same delivery conditions at the price established by NAK Naftogaz Ukrainy.

At the same time sources of debt repayment of JSC Odessa Port Plant before NAK Naftogaz Ukrainy for the consumed natural gas are means of society and/or means of the buyer of the block of shares of JSC Odessa Port Plant that is the obligatory fixed sales term of the block of shares of society.

18. The Ministry of Energy and Coal Mining will promulgate all information on calculation of the prices determined by this Provision, and also other information about gradual reduction of natural gas prices for residential customers, the religious organizations (except the amounts used for production of their production business activity) and producers of heat energy to market level on own official site.

19. The Ministry of Energy and Coal Mining reports to the Secretariat of Energy Community about the course of implementation of the actions provided by this Provision.

20. Persons who break regulations of this Provision bear responsibility according to the law.

Appendix 1

to the Provision

The list of suppliers of natural gas to whom special obligations on supply of natural gas to residential customers and the religious organizations (except the amounts used for production of their production business activity) before change of supplier of natural gas are assigned

Territory of licensed activities for distribution of natural gas	Name of the supplier  natural gas in the territory of licensed activities for distribution of natural gas
PJSC Vinnitsagaz	Vinnitsagaz Is Sold LLC
PJSC Volyngaz	Volyngaz Is Sold LLC
PJSC Gadyachgaz	Kremenchuggaz Supply LLC
PJSC Dneprogaz	Dnepropetrovskgaz Is Sold LLC
PJSC Dnepropetrovskgaz	Dnepropetrovskgaz Is Sold LLC
PJSC Donetskgorgaz	PJSC Donetskgorgaz
PJSC Donetskoblgaz	PJSC Donetskoblgaz
PJSC Zhitomirgaz	Zhitomirgaz Is Sold LLC
PJSC Zakarpatgaz	Zakarpatgaz Is Sold LLC
PJSC Zaporozhgaz	Zaporozhgaz Is Sold LLC
PJSC Ivano-Frankovskgaz	Ivano-Francovscgaz sbyt LLC
PJSC Kiyevgaz	PJSC Kiyevgaz Kiyevgazenerdzhi affiliated enterprise
PJSC Kiyevoblgaz	Kiyevoblgaz Is Sold LLC
JSC Kirovogradgaz	Tsentrgaz affiliated enterprise  JSC Kirovogradgaz
PJSC Korostyshevgaz	Polesyegaz LLC
PJSC Kremenchuggaz	Kremenchuggaz Supply LLC
PJSC Krivorozhgaz	Dnepropetrovskgaz Is Sold LLC
PJSC Lubnygaz	Lubnigaz Trading House LLC
PJSC Luganskgaz	PJSC Luganskgaz
PJSC Lvovgaz	Lvovgaz Is Sold LLC
CIAO Makeevkagaz	PJSC Makeevkagaz
PJSC Mariupolgaz	Azovgaz LLC
PJSC Melitopolgaz	Gas of Melitopol affiliated enterprise  PJSC Melitopolgaz
PJSC Nikolayevgaz	Nikolayevgaz Is Sold LLC
PJSC Odessagaz	Odessagaz Supply LLC
PJSC Poltavagaz	Poltavagaz Is Sold LLC
PJSC Rivnegaz	Rivnegaz Is Sold LLC
PJSC Sumygaz	Sumygaz Is Sold LLC
PJSC Ternopolgaz	Ternopolyoblgaz LLC
PJSC Ternopolgorgaz	Gazsnab affiliated enterprise  PJSC Ternopolgorgaz
PJSC Tismenitsagaz	Ivano-Francovscgaz sbyt LLC
PJSC Umangaz	Umangaz Is Sold LLC
PJSC Harkovgaz	Harkovgaz Is Sold LLC
PJSC Harkovgorgaz	Harkovgaz Is Sold LLC
PJSC Hersongaz	Hersonregiongaz LLC
PJSC Hmelnitskgaz	Hmelnitskgaz Is Sold LLC
PJSC Cherkassygaz	Cherkassygaz Is Sold LLC
PJSC Chernovtsygaz	Chernovtsygaz Is Sold LLC
PJSC Chernigovgaz	Chernigovgaz Is Sold LLC
PJSC Shepetovkagaz	PJSC Shepetovkagaz Shepetovkagaz affiliated enterprise
Kristall LLC Montazhnik affiliated enterprise	Montazhnik affiliated enterprise  Kristall LLC
Gazovik LLC	Gazovik LLC
Gazsnabservice LLC	Gazsnabservice LLC
State company "Kremenetsky Management of Supply and Gas Sale"	State company  "Kremenetsky management of supply and gas sale"

Appendix 2

to the Provision

The maximum trade margin of the supplier of natural gas with special obligations

Territory of licensed activities  on distribution of natural gas	Maximum trade margin  the supplier of natural gas with special  obligations in the territory of licensed activities for distribution of natural gas (without the value added tax),  hryvnias for 1 thousand cubic meters
PJSC Vinnitsagaz	42,5
PJSC Volyngaz	52,6
PJSC Gadyachgaz	64,2
PJSC Dneprogaz	89,7
PJSC Dnepropetrovskgaz	89,7
PJSC Donetskgorgaz	42,1
PJSC Donetskoblgaz	54,6
PJSC Zhitomirgaz	53,2
PJSC Zakarpatgaz	43,1
PJSC Zaporozhgaz	44,7
PJSC Ivano-Frankovskgaz	68,6
PJSC Kiyevgaz	60,6
PJSC Kiyevoblgaz	53,5
JSC Kirovogradgaz	50,8
PJSC Korostyshevgaz	86,1
PJSC Kremenchuggaz	64,2
PJSC Krivorozhgaz	89,7
PJSC Lubnygaz	43
PJSC Luganskgaz	40,9
PJSC Lvovgaz	83,5
CIAO Makeevkagaz	67,6
PJSC Mariupolgaz	39
JSC Melitopolgaz	60,8
PJSC Nikolayevgaz	86,7
PJSC Odessagaz	44,6
PJSC Poltavagaz	43,8
PJSC Rivnegaz	46,4
PJSC Sumygaz	41,9
PJSC Ternopolgaz	80,8
PJSC Ternopolgorgaz	33,9
PJSC Tismenitsagaz	68,6
PJSC Umangaz	38,2
PJSC Harkovgaz	54,3
PJSC Harkovgorgaz	54,3
PJSC Hersongaz	64,7
PJSC Hmelnitskgaz	44,4
PJSC Cherkassygaz	64,7
PJSC Chernovtsygaz	62,3
PJSC Chernigovgaz	60,2
PJSC Shepetovkagaz	45,7
Kristall LLC Montazhnik affiliated enterprise	74,1
Gazovik LLC	50,9
Gazsnabservice LLC	116,5
State company "Kremenetsky Management of Supply and Gas Sale"	55,5

 

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