Ukraine Allowed to Sell Up to 49% of Gas Pipeline System

Ukraine’s Parliament adopted on first reading a bill under which up to 49% of the country’s gas pipeline network could be sold to foreign investors. This could pave the way for US or EU companies, which have eyed Ukrainian gas transportation system over the last months. Russian daily Vedomosti quotes Ukraine’s Energy Minister Yuriy Prodan as saying the new legislation would contribute to a long-standing reform at the utility Naftogaz Ukraine (also among EU requirements to which billions-worth aid for the country is tied) and would also increase economic efficiency within the sector. Two private joint stock companies are to be created out of the network so that efficiency of activities could be improved. Prime Minister Arseniy Yatsenyuk was earlier quoted as saying that the bill would allow Kiev to « attract European and American partners to the exploitation and modernization of Ukraine’s gas transportation, » in a situation on Ukraine’s energy market he described as « super-critical ». Critics of the bill have repeatedly pointed the West has long been interest in Ukraine’s pipelines, with some seeing in the Ukrainian revolution a means to get access to the system. On Friday, Ukraine also announced it agreed to pay USD 365-370 per 1000 cubic meters of gas from the EU. This exceeds the USD 326 Kiev is ready to give for the same quantity of Russian gas, a price disputed by Russia which scrapped in April all concessions previously granted to the country and announced a 80% hike. Kiev however is increasing EU-originated deliveries, with 315.8 million cubic meters from the West in May compared to 170 million during the previous month.