Government takes lead in talks with potential management of Ukraine's gas transport system - Naftogaz CEO

NSJC Naftogaz Ukrainy is now taking no part in talks with potential partners on the management of Ukraine's gas transport system, Naftogaz CEO Andriy Kobolev has said.

"As of today, Naftogaz Ukrainy has been excluded from the process of negotiations with foreign partners. We are not taking part in it at the moment; it is now the government's domain. There is an ad hoc group headed by Deputy Prime Minister Volodymyr Kistion, who is engaged in negotiations with investors," he said on Channel 5 on Tuesday evening.

"Now I have no information and I do not know about the current progress and how far the ad hoc group has progressed, whether there are concrete results, whether there are new investors ready to partner," Kobolev said.

He recalled that the plan developed by Naftogaz with the support of PwC and Rothschild suggests signing an agreement on the management of Ukraine's gas transport system with foreign partners in the third quarter of 2018. "It is difficult for me to comment how the plan implemented by the government corresponds to our plan," he said.

Kobolev reiterated that underground storage facilities (UGS) should be singled out into a separate legal entity to make a foreign partner interested in the management of Ukraine's gas transport system, as possible risks associated with lawsuits filed by structures related to Dmytro Firtash and Ihor Kolomoisky for disputable volumes of gas in the storage facilities may frighten away European companies.

As was earlier reported with reference to Kobolev, Ukraine should come up with a detailed proposal as for attracting a European partner to manage its gas transport system in early 2018. Should it be delayed, Ukraine may face a loss of transit of Russian gas through its territory. Annual revenue from such transit shipments is estimated at about $ 2-3 billion.