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    Ukraine Relaunches Unbundling Plan


From next January, the transport landscape could look very different.

by: William Powell

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Ukraine Relaunches Unbundling Plan

Ukraine's government has adopted a new resolution on unbundling Naftogaz Ukraine, the state company said September 19. It will allow the demerger of the independent pipeline operator in January 2020, so that it operates in keeping with European energy market rules. The new entity will however remain under state ownership.

Naftogaz CEO Andrei Kobolev said that he was grateful to the secretariat of the Energy Community, the government and the regulator NKREKU for constructive co-operation and the preparation of a new model ready for adoption.

The earlier stage of unbundling allowed the creation of the Gas Transporter of Ukraine (UTSO), which was the basis for the creation of an independent operator. Naftogaz transferred 10,000 employees, IT systems and other assets and laid down the necessary business processes.

The new model will ensure the independence of the new operator and the complete separation of the activities of transport from production and supply, which is the final goal of unbundling. It will need a new law and a series of other practical steps enabling the completion of the process at the start of next January.

From that date on, Gazprom – and any other shipper – will theoretically negotiate transport tariffs with the Ukraine finance ministry, which will have to apply European network codes governing the sale and management of all capacity using a transparent methodology. At the moment capacity is sold to Gazprom in dollars, per volume per distance.

"When unbundling is complete, Ukraine will take a new step in the development of the gas market and fulfil the obligations it owes as part of the EC association agreement," it said.

The new decree envisages selling the UTSO to an entity distinct from Naftogaz: MGU (Magisralnye Gazoprovody Ukrainy). Simultaneously with the transfer of UTSO to MGU, the state will transfer the pipeline network to the management of the new operator. The government has already transferred MGU to the management of the finance ministry of Ukraine, Naftogaz said.