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Ukraine's parliament adopts in first reading bill on gas transportation system

Energy and Coal Industry Minister Yuriy Prodan said adoption of the bill would make it possible to reform Naftogaz of Ukraine and increase the economic efficiency of the oil and gas sector

© ITAR-TASS/Vitaly Grabar

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KIEV, July 04. /ITAR-TASS/. Ukraine’s Verkhovna Rada has adopted in first reading the bill allowing US, EU investors to own up to 49% of national gas transportation system.

Energy and Coal Industry Minister Yuriy Prodan, who presented the draft, said its adoption would “make it possible to reform Naftogaz of Ukraine and increase the economic efficiency of the oil and gas sector to bring it in line with the EU requirements following Ukraine’s accession to the Treaty establishing the Energy Community and further reduce Ukraine’s energy dependence”.

The minister said that “only the state alone or the state (with no less than 51% of corporate rights) and an enterprise owned and controlled by residents of EU countries, the United States or the European Energy Community can establish and own the entity to be created as the operator of underground gas storage facilities”.

According to the proposed draft, the gas transportation management system will be reorganized into two public joint stock companies — Trunk Gas Pipelines of Ukraine and Underground Gas Storage Facilities of Ukraine.

Parliament-appointed Prime Minister Arseniy Yatsenyuk said earlier that this law “will allow us to invite our European and American partners to operate and modernize the Ukrainian gas transportation system, with the Ukrainian state retaining control over the system”.

However, some deputies spoke against the transfer of the ownership rights to the gas transportation system to private companies and insisted that it be owned solely by the state.

Gas transit via Ukraine

The throughput capacity of the Ukrainian gas transportation is 288 billion cubic meters at the entrance and 178.5 billion cubic meters at the exit, including 142.5 billion cubic meters to European countries and 3.5 billion cubic meters to Moldova.

Ukraine’s gas transportation system consists of 72 compressor stations, 110 production shops and 1,451 gas distribution stations. The overall length of gas pipelines operated by the company is 38,600 kilometers, including 22,200 kilometers of trunk pipelines and 16,400 kilometers of extensions.

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