“The approved model has become a compromise between the proposal of the Ministry of Energy and Coal Industry to leave Naftogaz only its trading function, and the vision of Naftogaz itself that suggested unbundling of its transmission function only. The chosen model also took into account comments of the Secretariat of the Energy Community.
It should be noted that DiXi Group conducted a SWOT-analysis of the two models and presented its conclusions and recommendations that should be taken into account in developing the final version.
The model chosen by the government provides for the assignment of transmission and storage functions to the Ministry of Energy and Coal Industry which would be a reasonable step as storage has only indirect impact on gas transmission and gas market. At the same time, Naftogaz of Ukraine NJSC will keep its trading and production operator functions which gives the company quite an advantage on the market.
To assign natural gas transmission and storage functions to the Ministry of Energy and Coal Industry as the owner of 100% of shares, two new joint stock companies will be created — Mahistralni hazoprovody Ukrainy (Major gas pipelines of Ukraine) and Pidzemni gazoskhovyshcha Ukrainy (Underground Gas Storage Facilities of Ukraine). These will inherit, in addition to transmission and storage infrastructure, some loan liabilities from Naftogaz.
It should also be noted that the transfer of the company’s assets will commence only after the arbitration procedure with Gazprom OJSC is settled.
