Ukraine Sets Up Transport Arm for New Era
Ukraine state monopoly Naftogaz said December 11 it has finalised the preparations for the unbundling of the company's gas transmission activities, as part of its subsidiary Ukrtransgaz, but that full separation must wait until the Stockholm arbitration ruling on Ukraine's gas transport agreement with Russian shipper Gazprom. That ruling is now expected at the end of next February, although it has already been delayed.
In its first month of autonomous operation, the transport arm transmitted more than 12bn m³ of gas to both Ukrainian and international consumers.
“We promised to finalise all preparations for the TSO unbundling by December 1 2017 and we have done it,” said Naftogaz COO Yuriy Vitrenko.
The national gas market law and the EU Third Energy Package set Naftogaz specific tasks regarding TSO unbundling but much depends on decisions and actions of third parties beyond its own control, it said.
In addition, the energy ministry, which is to assume control over the TSO – according to the restructuring plan approved by government resolution – needs to prepare the new company, Magistralnye Gazoprovody Ukrainy (MGU), as a stock company with the right to issue shares; and facilitate the government’s approval of the list of assets needed for operations of the new TSO.
The list was compiled by Ukrtransgaz and consultancy PwC and does not contain “toxic assets”, which are either non-core, or loss making, or in the occupied territories in eastern Ukraine, or involved in disputes worth billions of hryvnias. There are also other technical or legal or other matters to be resolved. Naftogaz said it was ready to co-operate with both the government and the parliament to fulfil the objectives.
Naftogaz buys more gas with EBRD funds
Naftogaz said December 8 that it in third quarter of this year it had bought 1.8bn m³ gas from Swiss Axpo Trading, Czech CEZ, French Engie and German RWE and Uniper Global Commodities. In all, the 18 contracts cost $359mn, of which $300mn came from the European Bank for Reconstruction and Development and the rest from Naftogaz’s own funds. All five suppliers were identified as eligible by the EBRD prequalification procedure concluded in June 2017.
The weighted average price was $203/'000 m³, delivered to Ukraine's western border.
From December 2015 to March 2016, Naftogaz bought 1.7bn m³ of gas from five suppliers using the bank's credit facility, from August till October 2016 it bought 1.8bn m³ from 6 suppliers. The EBRD renewable credit facility of $300mn was opened in October 2015 and came with preconditions, including the implementation of the action plan on corporate governance reform in Naftogaz by the government of Ukraine.
The EBRD Facility is a renewable loan for a period of three years. During this period, Naftogaz may partially repay the loan and then again re-borrow the funds to finance gas purchases from the EU.