Naftogaz Applauds EU Competition Action

Ukraine's Naftogaz applauded the actions of EU Competition Commissioner Margrethe Vestager in formally charging Gazprom of breaking EU antitrust rules as an important step in safeguarding European energy security.

Stating that it has faced the detrimental effects of Gazprom’s dominant position in both EU and Ukrainian markets for years, the Ukraine counterpart to the Russian gas giant claims that Gazprom is continuing its infringement on competition by refusing to provide Naftogaz with shipping code pairs which prevents the signing and implementation of interconnection agreements compliant with EU energy regulation that would allow establishing virtual reverse flows (back-haul) between Slovakia and Ukraine.

This infringement on competition is created by Gazprom unlawfully performing some of the key functions of a TSO in Slovakia and by its refusal to provide Naftogaz with shipping code pairs which are necessary to remedy the situation.

Last year Ukraine and Slovakia established unobstructed physical gas flows between the countries in a west-to-east direction through a bypass pipeline (which has supplied the bulk of Ukraine’s gas imports in 1Q 2015).  Prior to this, Naftogaz claims that Gazprom's blocking of virtual reverse flows in Slovakia deprived European suppliers of their potential share of the sizeable Ukrainian market over the past years.

Naftogaz and Ukrtransgaz, the Ukrainian TSO, states that Gazprom’s uncompetitive behavior is hindering EU gas trading companies from executing upon their expressed interest in organizing gas flows through Ukraine between Hungary, Poland, Bulgaria, Greece and Turkey.