Naftogaz Unbundling 'Long Way to Go': Official
Ukraine's state gas group Naftogaz and the company designated to take over the future running from 2020 of Ukraine's gas transmission system operator, MGU, met with key stakeholders September 19.
The meeting was to enable both supervisory boards to present a roadmap for the unbundling of Ukraine's gas system prepared for them by consultancy PWC (click the weblink to its presentation that day). Both firms spoke positively about their preparations for the process. But a senior European official chairing a Balkans gas forum one day later questioned whether progress toward unbundling has been achieved.
“Unbundling is a project of high importance for us, and both Naftogaz and MGU are committed to do it right. I believe that the process should complete with an engagement of a qualified acceptable international partner. Such a partnership should enable Ukraine to preserve the flow of Russian gas and create a transparent competitive market,” said Naftogaz CEO Andriy Kobolyev September 19.
The two firms signed a memo of understanding July 24 agreeing the process to be followed. MGU supervisory board member Fabrice Noilhan, who is also an EDF gas executive, said that MoU provided "a way to work together to ensure Ukraine has a fully fledged independent transmission system operator. We have set clear targets, and we know who is in charge of each step of the plan. It is a shared priority for both companies to ensure the system works efficiently and that the transition proceeds smoothly. Of course, in this process we rely on support from our key external stakeholders."
Former Austrian regulatory chief Walter Boltz was appointed head of MGU's supervisory board in April 2018. MGU stands for 'Main Gas Pipelines of Ukraine' (Magistralni Gazoprovodi Ukraini). Last year PWC was appointed by Naftogaz to advise on the unbundling process.
The conclusions of the 13th Energy Community gas forum, held in Slovenia on September 20, said that one of its panel discussions assessed the potentials and pitfalls of ongoing Ukraine gas market reforms, noting: "Participants agreed that the stakeholders’ trust in a fully independent and functional TSO, confirmed by certification, is crucial for the sustainability of transit of natural gas through Ukraine in the post-2019 period. The forum urged the creation of a favourable regulatory and legislative environment for the establishment of an Ukrainian gas exchange."
Official criticises lack of progress
However the forum in the Slovenian capital Ljubljana heard from the Energy Community director Janez Kopac.
He said that, on Ukraine's unbundling, there had been little progress since 2017 and in some cases, progress reverses. His slide presentation said: "Ukrtransgaz is still under the firm grip of Naftogaz [and] the process of unbundling Ukrtransgaz from Naftogaz has not achieved its objective." He assessed it had progressed only 20% towards implementation by January 1 2020.
The Energy Community regroups the 28 EU states, plus non-EU countries in southeast Europe, including Ukraine. Ukrtransgaz is the current gas transit operator and is wholly-owned by Naftogaz.
Kopac's assessment is important, as progress towards unbundling is critical to success in reaching an agreement in three-way talks between Russia, Ukraine and the EU on maintaining transit flows post-2019 with a meeting of such experts scheduled to be convened in the near future.
Slide from Energy Community director Janez Kopec's presentation to its 13th Gas Forum (Credit: Energy Community). The banner photo shows a control room at Ukrtransgaz, the gas system operator expected to be unbundled from Naftogaz (Credit: Ukrtransgaz)