Ukraine Benefits from US Support
Top brass from Ukraine's state-controlled monopoly Naftogaz Ukrainy met senior US government officials May 18 in Kiev.
CEO Andriy Kobolev, business development director Yuriy Vitrenko and upstream division boss Oleg Prokhorenko met Amos Hochstein, who works on international energy matters in the US Department of State; Geoffrey Pyatt, the US Ambassador to Ukraine, and other delegates.
The US officials gave a positive assessment of Ukraine's sourcing of gas from Europe and the ongoing reform at Naftogaz and Ukraine’s gas market. They also commended the implementation of the corporate governance reform, which was based on OECD principles for state-owned enterprises.
Less than a year ago Ukraine was being attacked for raising taxes on production despite international treaties setting the investment terms; and for reorganising the gas market to the detriment of private gas producers.
Kobolev expressed gratitude for US support, observing that Ukraine’s gas market was developing with a solid basis for the country’s economic growth. This task is a challenge both technically and politically., he said: "We are happy to enjoy the ongoing and unfailing support of our international partners in pursuing this ambitious goal."
The projects successfully completed with the support of the US government include an assessment of existing upstream infrastructure and reforming the procurement procedures at upstream producer Ukrgazvydobuvannya.
The group is implementing a number of additional projects supported by the US Department of State. They are aimed at improving operational efficiency and governance of Naftogaz and its subsidiaries. These include the development of a modernization plan for drilling equipment and analysis of the company’s gas deposits.
Gas market rules develop
Naftogaz has published a proposal for a new Gas Transmission System Code which will regulate operation of the Ukrainian transimission system operator (TSO) Ukrtransgaz and its interaction with other market participants. It is inviting market participants to further discussions on it, in the interests of a liquid gas market.
In terms of balancing, the new draft code is based on the European Commission version. "Adoption of the new gas transmission system code as proposed by Naftogaz represents an important step towards creating an effective domestic natural gas market in Ukraine, which is in the best interests of consumers," it said. The code applies the principle of neutrality, so that the TSO does not make money from this and shippers are incentivised to remain within balance at the end of each day.
William Powell