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Ukraine opens tender for gas transport network upgrade

Ukraine’s law on reformation of the country’s gas transportation system came into force on September 10

© ITAR-TASS/Alexei Pavlishak

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Russia urges Ukraine to annul law on foreigners’ access to pipelines

KIEV, December 9. /TASS/. The Ukrainian government is opening a tender for potential investors to modernize the country’s Soviet-era gas transportation network, Ukrainian Prime Minister Arseniy Yatsenyuk said on Tuesday.

Ukraine’s law on reformation of the country’s gas transportation system came into force on September 10. The law allows foreigners to buy stakes in Ukraine’s gas transportation network.

The law stipulates that the country’s gas transportation system and underground gas storage facilities will remain in state ownership. At the same time, the law allows their transfer to specially established companies for management. The Ukrainian government will get a controlling stake in these management companies while other investors controlled by residents from the United States, the European Union or the European Energy Community are allowed to buy the remaining shares. However, this possibility is not stipulated for Russian companies.

The Ukrainian government plans to establish two joint ventures by January 1, 2015 to operate the gas transportation system and underground gas storage facilities as part of the domestic gas market reformation.

Under the reform plan, Ukraine’s international partners will own 49% in the joint ventures while the national gas pipeline operator Ukrtransgaz will control 51%.

Russia filed a complaint with the World Trade Organization (WTO) in November, saying Ukraine’s law on foreigners’ purchase of stakes in the Ukrainian gas transportation system ran counter to Kiev’s WTO obligations.

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Ukraine Oil & Gas Energy security

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