UkrTransGaz Takeover Reversed

Ukraine has reversed a situation whereby its national gas pipeline operator UkrTransGaz was abruptly placed under the direct control of the Economy Ministry and thus taken out of state gas group Naftogaz Ukrainy’s hands by means of an amendment to the latter’s charter.

A Naftogaz spokesperson told Natural Gas World late September 21: “The situation has been reversed. It was decided on Monday [September 19] that Naftogaz Ukrainy will be transferred to the Cabinet of Ministers. That should prevent such unilateral decisions from occurring in the future.”

The European Bank for Reconstruction and Development (EBRD), a lender to Ukraine, issued a statement saying that both it and the World Bank "welcomed the decision by the government of Ukraine to reverse last week’s changes of the charter of the energy company Naftogaz." Its statement was dated September 20 but was not released to its website. The EBRD statement noted it has already provided a $300mn loan to Naftogaz while the World Bank is preparing a US$500mn guarantee operation for gas purchases.

Ukrtransgaz's logo

The EU-led Energy Community was more guarded in welcoming the reversal. A spokesperson for its secretariat told NGW that it "welcomes that Ukraine has reacted to its concerns; however the new decision can only be of a transitional nature as it is neither in line with the Resolution of 1 July 2016 and the [EU] Third Energy Package, which requires the separation of natural gas transmission activities from production and supply of natural gas."

EBRD and Energy Community last week loudly condemned the economy ministry’s sudden action, saying it contravened previous agreements about a gradual unbundling of UkrTransGaz. Naftogaz too had warned that the ministry’s earlier action could complicate its own talks with its western lenders.

Mark Smedley