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Naftogaz of Ukraine and Ukrtransgaz together with Snam S.p.A and Eustream a.s. signed a Memorandum of Understanding for collaboration in the operation and enhancement of the gas transmission system in Ukraine
10.04.2017 | 16:37
INFORMATION AND COMMUNICATION DEPARTMENT OF THE SECRETARIAT OF THE CMU

National joint stock company Naftogaz of Ukraine, the operator of the Ukrainian gas transport system Ukrtransgaz jointly with the company Snam S. p.A. (Italy) and Eustream a.s. (Slovakia) signed a Memorandum of understanding on the joint assessment of opportunities for cooperation in the operation and development of the gas transport system (GTS)of Ukraine.

The document was inked in the presence of Minister of Energy and Coal Industry of Ukraine Ihor Nasalyk, EU Commissioner for Energy and Climate Change Miguel Arias Cañete and Minister of Economic Development of Italy Carlo Calenda.

Commenting on the signing of the MoU, Prime Minister of Ukraine Volodymyr Groysman said that the Memorandum reaffirms the interest in the Ukrainian GTS by the key operators of the GTS of Europe, in particular Snam and Eustream. "The signing of the Memorandum will allow already now to use the experience and knowledge of foreign partners to transform the Ukrainian gas operator in line with European standards. Such cooperation is an important signal proving the confidence in Ukraine and confidence in the importance of our gas transmission system", said the Head of Government.

Moreover, he added that the interest in cooperation had been expressed by other European operators, and the best proposal would be determined on a competitive basis, at that the final decision regarding a possible partnership, according to the law "On the Natural Gas Market", would be taken by the Ukrainian government.

The inked Memorandum is a document aimed at maintaining long-term sustainability of natural gas transmission through the territory of Ukraine in accordance with the standards of the European markets, and ensuring the safe and effective use of Ukraine's GTS, the transparent and non-discriminatory Third Party Access basis in compliance with the applicable law.

Under the Memorandum, the companies will undertake a joint assessment of the possibilities for the use and enhancing the gas transport network of Ukraine to make it more efficient, modern and competitive.

It should be noted, Ukraine engages in the unbundling of the transmission system operator the incumbent Naftogaz, the state-owned holding of a vertically integrated group of entities, and expressed interest in cooperation with the experienced Western GTS operators in the use of the national transmission system in accordance with the Law of Ukraine "On Natural Gas Market".

The implementation of this project is aimed to help to increase liquidity and security of supply for the gas markets of both Ukraine and the EU, which fully meets the Strategy of Energy Security of the EU.

 

Background

Naftogaz

Naftogaz of Ukraine is the national vertically integrated company engaged in full cycle of operations in O&G exploration and production, transport and storage, supply of natural gas and LPG to consumers. In 2016 the Group accounted for 79% of total gas production in Ukraine (15.9 bcm vs. 20.1 bcm), 74% of gas imports to Ukraine (8.2 bcm vs.11.1 bcm) and 82 bcm of gas transit to Europe (46% of total supplies of Russian gas to Europe). Naftogaz is the sole shareholder of Ukrtransgaz. Naftogaz is committed to be the leading engine of modernization and professionalism of the Ukrainian energy sector, integrated with the European market, ensuring security of supply and competitively priced energy while maximizing value of local resources.

Uktransgaz

Ukrtransgaz is the operator of one of the most powerful gas transmission and storage systems in the world. GTS entry capacity is above 302 bcm/year, exit capacity in the European direction is over 151 bcm/year and storage capacity is 31 bcm. Ukraine's GTS links the systems of the neighboring Russia, Belarus, Poland, Slovakia, Hungary, Romania and Moldova. Through them it is integrated into the wider European gas network remaining the shortest and the most efficient transit route and the essential element of security of supply in the region.

Snam

Snam operates and develops Europes largest, most accessible pipeline network (which extends for more than 40,000 km), the largest storage infrastructure in Europe (19 bcm capacity) and one of the first LNG terminals built in Europe. Snams investments across Europe aim to facilitate the European energy union network integration and to promote gas as a key pillar of a sustainable energy mix. Leveraging its expertise and core competencies, the Company has recently launched Snam Global Solutions to deliver studies, consulting and project management activities to the market.

Eustream

Eustream is the owner and operator of one the largest gas transmission systems in the European Union. Eustreams mission is to transport natural gas in Slovakia and through Slovakia to the European markets. Eustream is a long-term partner to Ukrainian gas transmission system by being directly interconnected with Ukraine in both natural gas flow directions.

 

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