[Premium] Ukraine Seeks Prestigious TSO for Partnership.

Ukraine's plan to unbundle gas transmission and storage from trade and supply are proceeding, despite the apparent problem posed by Gazprom's rejection of the Stockholm commercial court's judgement.

Ukraine's gas monopoly Naftogaz is seeking a "partnership that would convey trust and motivate EU shippers to start using our system. The government is in agreement with this goal. Naftogaz has run tenders and selected a number of suppliers to advise on technical, legal and investment-banking issues related to the unbundling. The suppliers include PwC, EY and Rothschild. A tender for project management and implementation is now open for bidding,"  it told NGW March 12.

It has said that before it can unbundle, it needs to resolve the contractual dispute on gas transport. The contract dates back to 2009, and the dispute was apparently resolved at the end of February by the Stockholm commercial court. However Gazprom rejected the judgment because, it said, it ignored the principle of commercial symmetry between the two parties. It has since returned the prepayment for March deliveries to Kiev, and not delivered any gas for Ukraine's use. 

Naftogaz' lawyers are studying the impact of Gazprom's "recent failures on the supply and transit contracts, as well as their announced desire to terminate both of them," Naftogaz told NGW.

Naftogaz is not at the moment looking for external investment as the pipeline system is "in a very robust shape, as the recent crisis has demonstrated. It generates more than enough revenue to fund maintenance and modernisation. The best way to make sure it’s funded is to make sure it is used."

Last year it earned over $2bn from Gazprom but, with the reversal of the ban on using all of Opal in the summer of 2017, Gazprom's use of Ukraine is likely to be lower this year as it boosts its exports through Nord Stream instead. 

"We are committed to implement the Third Energy Package and engage a strong European transmission system operator as partner to co-manage the system," said Naftogaz. Under EU law, gas storage and transmission are to be separated, and both are to be separate from supply and trade.

In April 2017 some EU firms signed a memo of understanding with Naftogaz and its pipelines subsidiary expressing interest in jointly collaborating in future in the operation of Ukraine's gas transmission system, while other firms had also expressed interest previously, but involvement to date has been tentative.