Ukraine Will Liberalise Gas Market by 2014 - Ukraine's Energy Official

KYIV, Ukraine, April 12, 2013 /PRNewswire/ --

Ukraine will complete the liberalization of its gas market according to European standards by 2014. The plans were announced by Volodymyr Makukha, the Deputy Minister of the Energy and Coal Industry of Ukraine. Ukraine intends to finish the restructuring of its gas monopoly Naftogaz and attribute the functions of gas extraction, storage, transporting, purchasing, and selling to independent entities.

Makukha singled out the adoption of the law regulating the Ukrainian gas market as a significant development in the gas market liberalization. Ukrainian parliament voted in the law on the natural gas market in 2010. The document corresponds with all 55 Directives of the EU, noted the state official. It nears Ukraine to European standards and introduces clear and transparent rules for the functioning of the gas market in Ukraine, regulating gas extraction, storage, transporting, purchasing, selling, and associated activities.

Another step that Ukraine made to liberalise its gas market were the new rules of access to its gas transporting system. The respective regulations were adopted in April of 2012. They created legal basis for the introduction of foreign traders into the Ukrainian gas market, providing them access to the Ukrainian pipeline network.

Historically, the Ukrainian gas market has been a state monopoly. The public company Naftogaz is responsible for the majority of transactions in the gas business. Ukraine aims to provide non-discriminatory access to its gas network and turn over the control of gas transportation and gas distribution to legally independent entities.

Aiming to integrate its gas transporting system into the European market, Ukraine joined the Energy Community Treaty. On February 1, 2011, the Eastern European country became a full member of the European Energy Community.

In February 2012, Ukraine called for the creation of a tripartite gas consortium, featuring Ukraine, the EU, and Russia, in order to provide more efficient management of the country's 37,000 kilometer gas pipe network. Facing the challenge of wear and tear, Ukraine anticipated the tripartite consortium would undertake the task of the modernization of the country's gas transporting system. In October 2012, the Head of the Delegation of the EU to Ukraine Jan Tombinski informed the EU was set to contribute to the modernization of Ukrainian GTS.