Ukraine invites EU companies to buy into gas pipeline system

Ukraine would like European companies to buy shares in its natural gas pipeline system as a way to achieve energy independence for itself and the European Union and lay the basis for "what would on the whole be a new energy policy in Europe," Ukrainian Prime Minister Arseniy Yatsenyuk said on Monday.

Ukraine would like European companies to buy shares in its natural gas pipeline system as a way to achieve energy independence for itself and the European Union and lay the basis for "what would on the whole be a new energy policy in Europe," Ukrainian Prime Minister Arseniy Yatsenyuk said on Monday.

"We want to see our European friends and partners as shareholders in the gas transmission system," Yatsenyuk said at an EU-Ukraine summit in Kiev. "That would be the best response to the need for the energy independence of Ukraine and the EU, and create what would on the whole be a new energy policy in Europe."

Under a Ukrainian law put into force on September 10, 2014, the gas transmission system and underground gas depots are to remain state property but may be put under the management of companies specially set up for this. The state would hold controlling stakes in such firms while the rest of the capital may be sold to European or American businesses.

The Ukrainian government plans to set up two managing companies of this kind with partially American and European capital.

The law has lifted restrictions on the leasing of trunk pipelines and underground depots to private companies for the purpose of management but prohibits their alienation.

Such lease contracts will be allowed if the fulfillment of Ukraine's commitments under the Energy Community treaty is their sole purpose.

A transmission system or underground depot management company must be entity founded and owned either by the Ukrainian state, or by a Ukrainian state-controlled enterprise (where the state owns a minimum stake of 51 percent), or by an entity or entities belonging to residents of EU countries, the United States or European Energy Community countries.

Such foreign entities would have to be operators of European gas pipelines or members of the European Network of Transmission System Operators for Gas (ENTSOG) and to have been licensed as meeting the requirements of a directive by the European Parliament and European Council prescribing uniform rules for national gas markets.

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