Naftogaz supports application of transparent free market principles to all routes of Russian gas delivery to the EU

Naftogaz, Ukraine’s national oil and gas company, welcomes the notion that energy supply to the European market should be based on transparency and free market principles ...

Naftogaz, Ukraine’s national oil and gas company, welcomes the notion that energy supply to the European market should be based on transparency and free market principles, as stated last week by Mr. Gabriel, German Foreign Minister, and Mr. Kern, Austrian Federal Chancellor.

"Uniform application of the Third Energy Package and preserving the existing gas delivery routes provides an optimal solution for the European gas consumers based on transparency and free market principles,” said Andriy Kobolyev, CEO of Naftogaz.

Third Energy Package protects the interests of the European consumers and should be uniformly applied

The principles of the secure and competitive gas supply to the European Union are laid out in the EU’s comprehensive Third Energy Package. Ukraine joined the Energy Community and currently promotes these principles into its national legislation.

Naftogaz shares the view that the European Commission should use its mandate as a guardian of the interests of the European consumers and insist on the application of the Third Energy Package to the Nord Stream 2 project. It should also consider applying the same framework to Nord Stream 1, as it was applied to Yamal and another export pipeline project South Stream. This legal framework shall ensure proper regulatory and anti-trust safeguards against market manipulations and abuse of dominance.

Naftogaz is not requesting any concessions or exemptions from the European rules and strives to operate in the level playing field.

Gazprom, on the contrary, rejects the application of the standard European rules to its Nord Stream 2 project and relies heavily on numerous carve outs from the Third Energy Package in its activities in Europe.

Risks posed by the Nord Stream 2 to the public interest and the EU integrity outweigh potential commercial benefits for a narrow group of businesses

The Nord Stream 2 project undermines the solidarity in the EU and within the Energy Community. The project already jeopardizes the development of the Energy Union by antagonizing the member states.

If built, the pipeline will destabilize existing secure gas delivery routes. It endangers Europe with price manipulations and additional costs, goes against the principle of efficient use of infrastructure, and leads to concentration of delivery routes under Russia's control, without providing access to any new sources or suppliers of energy.

In addition, the project will inflict unjustified environmental damage to the fragile ecosystem of the Baltic Sea.

The traditional gas delivery route is a reliable solution serving EU energy security, gas market development and the public interest

The traditional land-based pipeline route running through Ukraine offers unmatched transmission capacity, reliability and flexibility to deliver gas to the EU under the European rules of business. The traditional route is also the most cost efficient way to deliver Russian gas to Central, Eastern and Southern Europe.

Out of all options, it is the only delivery route of Russian gas which is fully unbundled from the Russian monopoly supplier.

This infrastructure is already existing, secure and well maintained. Unlike Gazprom, the Ukrainian operator discloses its data online at the ENTSO-G transparency platform and cooperates with the European Commission.

To provide additional comfort to European gas buyers, Ukraine is discussing a joint venture with reputable Western transmission system operators to co-manage its gas transmission system.

Corporate Communications Department
NJSC Naftogaz of Ukraine

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