“Ukrainian GTS is reliable, transparent and needs no replacement” – Head of Naftogaz


Kyiv, July 23, 2014. The need to reform “Naftogaz of Ukraine” (Naftogaz) takes its roots from a number of perils facing Ukraine and the European Union, said Andriy Kobolev, CEO of the National Joint Stock Company “Naftogaz of Ukraine” at a press briefing in Ukraine Crisis Media Center.

Some of the biggest risks for Ukraine, according to Kobolev, are the catastrophic increase of the Naftogaz budget deficit and the unstable supply of gas this winter. The EU, on the other hand, may face a growing dependence on Russian “Gazprom” and the loss of its prospects in the Ukrainian gas market. The proposed action plan, however, provides for the strengthened energy security of Ukraine, and increased state revenues, said the official. In addition, the reform is to establish two private legal entities which will be separately engaged in transportation and storage of natural gas, reported Kobolev.

In his speech Naftogaz CEO also named three leading reforms of the sector – bringing the legal structure of the Ukrainian gas market in accordance with the European Union’s Third Energy Package, encouraging the rational use of energy and natural gas in Ukraine as well as bringing wholesale domestic gas prices to the single market level. “There should be a single wholesale price for gas – it would remove a large number of corrupt elements and make the gas market transparent,” noted Andriy Kobolev.

The Naftogaz CEO expects that the respective package of laws will be adopted by the Verkhovna Rada (Ukrainian Parliament)  in the nearest future. The reform, he said, provides for  a transitional period until January 1, 2015, keeping tight control over the ultimate owners of the companies. Naftogaz official also noted that the process of attracting private companies to manage the Ukrainian gas transportation system will be open and transparent, making domestic gas market more competitive. “If there is a state property, which is controlled by private companies – the state should get a fair rent,” he emphasized.

In addition, Andriy Kobolev spoke about the progress of the lawsuit filed by Ukraine against the Russian gas giant “Gazprom” in the Stockholm arbitration. The official noted that the team of hearing referees is currently being selected. Meanwhile, Russia has filed a counterclaim, making the maximum use of the time alloted for the preliminary procedures, to postpone the  actual hearing, concluded the Naftogaz CEO.