JSC Ukrtransgaz does not have an opportunity of paying under contracts to buy gas for own technological needs on time due to a lack of funds, which puts under a threat the operation of the gas transmission system (GTS) of Ukraine after June 24, 2019, the company said on Friday.

"The company initiated negotiations with creditors, including [the parent company] NJSC Naftogaz Ukrainy on debt restructuring. The National Security and Defense Council of Ukraine was notified about the situation," the company said in a statement.

According to the company, Ukrtransgaz also sent a letter about the occurrence of the prerequisites of an emergency situation to the State Emergency Service of Ukraine and is negotiating with the the National Commission for Energy, Housing and Utilities Services Regulation (NCER) to immediately rectify the situation.

The company said that its debt in March-April to fuel gas suppliers amounts to UAH 4.1 billion, so some of them refuse to supply gas volumes under existing contracts. The residual volumes of gas for technological needs, purchased under preliminary contracts, are sufficient to ensure the operation of the gas transmission system only until June 24, the company said.

Ukrtransgaz said that the financial situation of the company worsens every month due to economically unjustified temporary tariffs for the GTS operator, which NCER approved at the end of 2018 and which allow timely payment for the purchase of gas for technological needs in the amount of up to 60% of the required annual level.

The company said that the second reason is the problem of unauthorized gas withdrawal from the gas transmission system, as a result of which the debt of market players for balancing services in the period from 2016 to February 2019 exceeded UAH 35 billion, of which 91% is the debt of regional gas supply companies.