Kiev Agrees Timing for Gas TSO Unbundling

The supervisory boards of Ukrainian state Naftogaz and the independent transmission system operator-to-be, Magistralni Gazoprovody Ukrainy (MGU), have set a timetable for the unbundling of the latter. Naftogaz supervisory board is chaired by former British gas regulator Ofgem, Clare Spottiswoode; her counterpart at MGU is the former head of Austrian regulator E-control, Walter Boltz.

MGU was set up by the Ukrainian government and, like Naftogaz, has a supervisory board with a majority of independent members, said Naftogaz September 12. Its major contract is with Russian exporter Gazprom, which has objected to the assignment of the contract to a separate company.

The supervisory boards agreed that any loss of control by Naftogaz or Ukrtransgaz over the assets associated with gas transit, prior to the expiry of the contract December 31, 2019, would create substantial financial risks. It could also pose material risks to the reliability of gas supplies to European consumers. Gazprom’s unwillingness to co-operate therefore defers any possibility of ownership unbundling to 1 January 2020, Naftogaz said. 

Spottiswoode said that the boards of Naftogaz and MGU were demonstrating commitment to work collaboratively to make the unbundling happen while ensuring operational efficiency of gas transmission. Boltz for his part said that this understanding "is a solid step on the way to unbundle the TSO by 1 January 2020. We set as our first priority the need to guarantee security of supply for Ukrainian gas consumers and assure uninterrupted gas transit to Europe.”