Naftogaz contracts PwC Polska to facilitate the unbundling of the TSO operator from Naftogaz

Naftogaz contracts PwC Polska to facilitate the unbundling of the TSO operator from Naftogaz

KYIV, 25-Oct-2017 — /EuropaWire/ — The unbundling of the gas transmission function from Naftogaz and creating a transmission system operator (TSO) certifiable under European regulations is not only about Ukraine’s compliance with the European law; it also important for preserving gas transit via Ukraine after 2019, said Pawel Dobrowolski, PwC Polska Director, at the 20th International Conference Oil & Gas 2017 in Kyiv. Naftogaz has contracted PwC Polska to facilitate the unbundling process.

The Polish expert reported on the results of this work and the next steps, which were supported by the Energy Community Secretariat. According to the plan, the unbundling of the TSO operator from Naftogaz will be implemented in three stages. At the first stage, the TSO branch will be established within Ukrtransgaz. The branch is expected to accumulate core functions, employees and assets necessary for the unbundling in 4Q 2017. The second stage is the creation of a lean TSO on the basis of the branch, an organization of 200-300 employees that will perform core TSO functions. At the final stage, a full-fledged TSO with all necessary functions will start its operation. The newly established TSO will be ready to apply for a certification under the EU regulations and can be legally transfered to an entity designated by the government. This process will ensure that gas transmission will remain stable during the unbundling.

Among the prerequisites for a successful unbundling, Pawel Dobrowolski mentioned updating the regulatory framework, establishing a proper corporate governance system in the new TSO, obtaining an arbitration decision in the Stockholm transit case as well as enabling a potential engagement of a European TSO partner.

During the discussion of the PwC report, Naftogaz CEO Andriy Kobolyev mentioned that a number of reputable Western companies have expressed their interest to participate in the operation of the Ukrainian GTS. He said that Naftogaz was negotiating with four interested TSOs from the EU. He also noted that according to Ukraine’s legislation Russia was not in the list of countries whose companies were eligible participate in the partnership. “The engagement of a European partner or partners is a sole success criterion of our unbundling efforts. Unfortunately, a European partner will not guarantee the continuation of transit, however the absence of a partner will definitely result in the termination of transit,” Andriy Kobolyev believes.

It is expected that the government approves contest conditions for engaging of a potential partner to operate the Ukrainian gas transmission system in November 2017.

The presentation of Pawel Dobrowolski is available under this link.

SOURCE: NJSC Naftogaz of Ukraine

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