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    Ukraine Gas Exchange Discussed in Kiev

Summary

An event to discuss setting up a Ukrainian gas exchange was held this week. But is this putting the cart before the horse?

by: Mark Smedley

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Natural Gas & LNG News, Europe, Political, Regulation, Supply/Demand, Balkans/SEE Focus, TSO, News By Country, EU, Ukraine

Ukraine Gas Exchange Discussed in Kiev

An event to explore the idea of setting up a Ukrainian gas exchange was held in Kiev November 19, hosted by two EU-based agencies. 

The secretariat of the Energy Community, which regroups EU states with non-EU ones in the Balkans alongside Ukraine, along with the European Bank for Reconstruction and Development (EBRD) hosted the event at which foreign and Ukrainian stakeholders, including exchanges, transmission system operators (TSOs), traders, regulators, government officials, and financiers were gathered.

Participants endorsed an implementation roadmap, foreseeing the establishment of a fully-functional exchange with clearing services, as well as a blueprint of what a Ukrainian gas exchange could look like, and the key steps needed to get there, the Energy Community said November 21. The roadmap, blueprint and key steps were developed with its, and the EBRD's, support.

Energy Community director Janez Kopac said: "It is very important that a country of this size and with such a significant natural gas market starts to consider the establishment of a gas exchange seriously. The exchange will deliver market prices, liquidity, reliability and the much needed trust among stakeholders. Needless to say, it will strengthen the importance of Ukraine as a regional gas transportation hub." The agency said that the next stage of the process will be formalising cooperation between Ukrainian authorities, EBRD and the Energy Community secretariat.

Kopac however said two months ago that Ukraine's state gas group Naftogaz and MGU, the company designated to take over the future running, from 2020, of the country's gas TSO, still had a long way to go before unbundling of Ukraine's gas system from state and producer interests is successfully achieved. Unbundling is seen by some as a precursor to both any discussion of creating a Ukrainian gas pricing hub, or a resolution of the impasse between Moscow and Kiev over what should happen to Russian gas transit contracts via Ukraine when these lapse in 2019. 

A European Commission spokesperson told NGW on November 9 that, following two trilateral meetings of Russia, Ukraine and the EU at a technical level in September - following a political meeting in Berlin in mid-July that agreed a roadmap for such talks - all parties are now looking for a date for the next political-level meeting but that "so far there is no date to announce".