Law on gas market reform opens way to GazProm expansion in Ukraine

Formally, the law abides by the Brussels March 2009 declaration which foresees the implementation of European standards on the Ukrainian gas market. However, real changes will be hinged on further steps by the Ukrainian cabinet, UNIAN reports July 26.

The law stipulates the separation of a pumping company from NaftoHaz Ukrayiny as well as equal access to all market players to gas pipelines and gas reservoirs now owned by Ukraine.

As pointed out by the expert, the law ignores another guideline by the European Commission which limits access to the market for investors which do not have separated companies for pumping, extraction and sale of gas. 

“Therefore, even given a partial liberalization of the market, the law opens the way top GazProm’s wide expansion on the Ukrainian market, hitherto kept in check.
Anna Hurska reminds that, despite its license to sell 7.5 bln cu m of gas in Ukraine last year the Russians sold only 2.8 bln. 

The expert also draws attention to the fact that, contrary to the provision of the law about the free selection of seller and supplier, in practice the selection is regulated by the cabinet-controlled National Commission for Electricity Market. 

The law may lead to the liberalization of the gas market in Ukraine. However, it can be used by the cabinet to arbitrarily distribute the market. 

“The law is the result of EU and IMF pressure on the Ukrainian cabinet. It indicates Kyiv’s willingness to maintain cooperation not only with Moscow and GazProm but also with the West,” the expert notes.