By adopting a Law on amending several legal acts for the purpose of unbundling the gas transmission system on 15 November, the Verkhovna Rada of Ukraine created the necessary conditions for establishing an independent system operator (ISO) for gas in line with the Third Energy Package applicable under the Energy Community Treaty. Following years of inertia and political infighting, the adoption of the Law removes one of the main obstacles to compliance in the country’s gas sector and for the continuation of long-term gas transits from Russia.
The gas ISO, which has already been created within the vertically integrated gas incumbent Naftogaz, will now have to be transferred to the Ministry of Finance. The ISO will operate the Ukrainian gas pipelines which are and will remain in the ownership of the state.
While the adoption of the Law constitutes a first important step, further measures including the signature of the relevant agreements between Ukrainian companies and authorities and their taking effect on 1 January 2020 will now have to be taken swiftly. The unbundling of the gas ISO will have to be certified by the Ukrainian regulatory authority with a positive opinion of the Secretariat of the Energy Community.