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Oleksii Orzhel: Ukraine will complete the unbundling in time for signing a gas transit contract with Russia

09 October 2019

The Minister also counts on the opportunity to bring investments in an independent gas transmission system operator

Speaking at the fifth Ukrainian Gas Forum, Oleksii Orzhel, Minister of Energy and Environmental Protection said that the Russian party shows their readiness to sign a gas transit contract if Ukraine completes the unbundling in due time and in accordance with European legislation, Ukrainian Energy reports.

"We work with European partners, and have a contract with the Russian party. After the first round of talks with the Russian party, we gathered that if everything on the Ukrainian side will be ready, we will sign the contracts," Mr. Orzhel said.

He also reminded that the Verkhovna Rada has recently registered a draft law required for the unbundling, and that the government resolutions are also ready.

"Presently, we all are working on making the unbundling happen, receiving and certifying an independent GTS operator, and signing new contracts coming into effect on 1 January: on interconnectors and on transmission… I am sure that everything on our part will be ready," the Minister stressed.

Mr. Orzhel also pointed out the opportunity to bring investments in Ukraine’s GTS if European legislation is complied with during the unbundling process.

"The signature of a transmission contract in accordance with European legislation would ensure another very important point besides the factor of operation of Ukrainian infrastructure. It would provide an opportunity for us to bring investments," Mr. Orzhel said.

It is worth reminding that the government has updated the unbundling plan for Naftogaz of Ukraine NJSC according to requirements of the Third Energy Package. Trunk Gas Pipelines of Ukraine PJSC will become the GTS operator, re-subordinated from the Ministry of Energy and Environmental Protection to the Finance Ministry of Ukraine. The Finance Ministry is also a shareholder of Ukrenergo NPC, a system operator of trunk electricity networks.

The unbundling model was one of the biggest points of disagreement between the Volodymyr Groysman government and Naftogaz. The government insisted on the ownership unbundling (OU) model, while Naftogaz favored the ISO (Independent System Operator) model.

In October, UGTSO applied to the National Commission for Government Regulation of the Energy and Utilities Sectors (NCREUS) for certification as a gas transmission system (GTS)operator. NCREUS believes that certification could be done faster than in four months.

The Energy Community declared support to the government’s draft law on Naftogaz’s unbundling based on the ISO model.

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