Naftogaz starts the first stage of the TSO unbundling

The Energy Community Secretariat has supported the internal restructuring plan for Ukrtransgaz as an important step towards the unbundling

The Energy Community Secretariat has supported the internal restructuring plan for Ukrtransgaz as an important step towards the unbundling
On 29 September, Naftogaz, the sole shareholder of Ukrtransgaz, agreed the internal restructuring of Ukrtransgaz through the creation of a new branch named Ukraine’s Gas Transmission System Operator (UGTSO branch). The restructuring is an effective step towards the TSO unbundling stipulated in Resolution #496 issued by the Cabinet of Ministers of Ukraine on 1 July 2016. The new branch of Ukrtransgaz will concentrate all business processes, assets and staff necessary and sufficient to ensure gas transmission through Ukraine. After full legal separation from Naftogaz, this branch will apply for TSO certification according to EU requirements.

Naftogaz and Ukrtransgaz presented the internal restructuring plan for Ukrtransgaz to the Energy Community Secretariat. The plan was supported by the European authority, which is entitled to evaluate how the implemented gas market reform complies with Ukraine’s international commitments.

“Current internal restructuring is a very right and first decisive real step towards unbundling we see from the Ukrainian side. It is done by the people who know the process best and helps the government to properly finalize it,” Director of Energy Community Secretariat Janez Kopaи stated.

All necessary TSO functions will be established and launched within the branch. This will facilitate seamless transfer of gas transmission to an independent legal entity in line with the Cabinet’s Resolution #496. The internal reorganization prior to the legal separation of the TSO will ensure uninterrupted gas transmission to Ukrainian and EU consumers during the unbundling.

“Neither transit to Europe nor gas transmission to Ukrainian consumers may be interrupted even for a day. We are conscious of this responsibility. To ensure seamless unbundling of the TSO, we have elaborated a plan of practical steps based on successful experience of other countries. The Secretariat supported these steps,” Naftogaz CEO Andriy Kobolyev says.

The suggested approach is a result of the project carried out by Naftogaz, Ukrtransgaz and PwC, international advisors with vast experience in similar unbundling cases in Poland, Germany and Greece. The plan was also agreed with Naftogaz supervisory board.

Within the scope of the project and in line with the unbundling plan, PwC has also prepared a list of assets sufficient for the TSO operation and its future certification.

Background information:

To fulfill Ukraine’s commitments regarding the TSO unbundling, the TSO shall be established as a legal entity independent from Naftogaz or any other energy generating enterprise. In its Resolution 496, the government has ordered the Ministry of Energy and Coal Industry to develop and implement the corporate governance structure for Mahistralni Gazoprovody Ukrainy created to take over the gas transmission function, as well as and to transfer the Ministry's corporate rights in energy generating enterprises (Ukrhydroenergo and Energoatom) to another asset manager.
Corporate Communications Department
NJSC Naftogaz of Ukraine


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