EU Firms in Ukraine Pipe Talks

Ukraine’s Naftogaz and pipeline subsidiary Ukrtransgaz, Italy’s pipeline operator Snam and Slovakia’s Eustream have signed a Memorandum of Understanding aimed at jointly evaluating opportunities for collaboration in the operation and enhancement of the late Soviet-era gas transmission system (GTS) in Ukraine, Naftogaz said April 10.

The MoU was signed in the presence of Ukraine’s energy minister Ihor Nasalyk, EC Commissioner for Climate Action and Energy Miguel Arias Canete and Italy’s energy and economy minister Carlo Calenda.

Goals include ensuring the Ukrainian pipeline system "is operated in a safe and efficient manner and is accessible on a transparent and non-discriminatory third-party access basis, in compliance with the applicable legislation," it said.

Under the scope of the MoU, the companies will make a joint assessment on the operation and enhancement of Ukraine’s gas transmission network in order to make it "more efficient, advanced and competitive."

Signing of the MoU on April 10, with Snam CEO Marco Alvera, centre  (Photo credit: Snam)

Ukraine is implementing the unbundling of the gas transmission system operator (TSO) from the incumbent Naftogaz and has expressed its interest in co-operating with an experienced western European transmission system operator(s) in the operation of the national transmission system, in accordance with the law on the gas market.

This will help fostering the liquidity and security of supply for both the EU and Ukraine’s gas markets, fully in line with the EU Commission Energy Security Strategy, it said.

Russian exporter Gazprom is the biggest user of the Ukrainian pipeline system at the moment, although an operational Nord Stream 2 line due by 2019 would enable it to take another 55bn m³/yr out of the UkrTransGaz network. It is planning to decommission some compressor stations in western Russia later this decade as they will no longer be needed.

Ukraine is also seeking a role as transit country between EU member states and also to market its storage capacity, with some already sold.

Snam is a 49% stakeholder in Gas Connect Austria, the national transmission system operator whose portfolio of high-pressure lines includes TAG, capable of bringing 45bn m³/yr of gas from Baumgarten, near Austria's border with Slovakia, westwards into northeast Italy.

Wanted: unbundling expert

Aside from that, Naftogaz announced a tender for a qualified project management services company to oversee the unbundling of the pipeline business. The contract is for an estimated $900,000, for completion by December.

"Considering the crucial role of the gas transmission function for Ukraine’s economy and gas consumers in both Ukraine and the EU, Naftogaz announces an open bidding for a qualified project management services with respect to the unbundling of gas transmission operations," it said.

Tasks include co-ordinating the efforts of employees, experts or other consultants involved and to make recommendations based on the advisor’s experience of other unbundling projects in EU member states and to promote informed and effective decisions in the unbundling process.

William Powell