On 9 April 2015, Ukraine’s parliament approved sweeping reforms to the country’s natural gas market an English version of which can be found here.
The law – an English version of which can be found on this page – was signed off by Ukraine’s president Petro Poroshenko on 5 May 2015 and entered into force on 8 May 2015.
Most of legislation covered by the new law is scheduled to take effect from 1 October 2015.
Ukraine’s natural gas market is to be liberalised and its new structure will conform to the rules laid out in the EU’s third energy package. This will mean the state-owned supplier Naftogaz will be operationally and legally separated from Ukrtransgaz, which runs the transmission system and the country’s fleet of storage units.
The law has also permitted that 49% of Ukrtransgaz can be sold to either a European or US energy company experienced in running a natural gas network. Naftogaz, meanwhile, will remain in state hands.
By transposing EU legislation on natural gas market design, Ukraine will also introduce a virtual trading point, creating a centralised location for the trade of wholesale natural gas. The unbundling of the pipeline and storage infrastructure is intended to create a level playing field in capacity-access and trade, which should boost competition and ultimately cause both wholesale and retail gas prices to fall.
In recent years, Ukraine has increasingly sought to diversify its natural gas supply, purchasing more volume at the traded hubs of the EU. At the same time, it has altered its procurement strategy with its historic supplier, Russia.
European Spot Gas Markets (ESGM), published daily by ICIS, is the benchmark price report for the EU’s traded wholesale gas hubs and carries the industry standard Heren Indices. It also includes detailed news and analysis on the whole of the European natural gas market, from the most liquid traded points such as Britain’s NBP and the Netherlands’ TTF, through to the emerging markets in the south and east of the continent.
The developments in Ukraine, which often drive the volatility of the traded natural gas markets, is frequently covered by ESGM, as is the supply/demand balance of the country.
For more information on the Ukrainian natural gas market, please contact the Editor of ESGM, Tom Marzec-Manser on firstname.lastname@example.org
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