Ukraine lifts regulatory restrictions on gas exports

Ukraine has amended legislation that previously restricted exports of natural gas and anthracite. ‘This represents an unexpected move for a country which is a net importer of natural gas,’ comments international law firm CMS. ‘If it achieves its desired aims the Resolution will mark a significant step towards the liberalisation of the natural gas market in Ukraine, enabling the flow of natural gas from European Union countries with which Ukraine has interconnectors, and also from Ukraine to them.’

Since 2006, the export of gas of Ukrainian origin has been heavily restricted by regulatory obstacles such as licensing (issued by the Ministry of Economy) and quotas (such quotas being determined on the basis of the Annual Gas Balance, usually equal to zero), explains CMS. As a result, Ukrainian gas producing companies (both state-owned and private ones) have not exported natural gas from Ukraine since 2011.

It should be noted, however, that due to Ukraine’s recent switch to a system of tariffs for entry/exit capacity at Ukraine’s gas interconnectors with neighbouring EU countries, exporters of natural gas from Ukraine are now required to pay the tariffs for using Ukraine’s gas system exit capacity at those interconnectors. Such tariffs are calculated and approved by the Ukrainian energy regulator (the National Commission on the State Regulation of the Energy and Public Utilities Sector) for each particular exit point in $/1,000 cm.  ‘At present, the relevant exit tariffs are only established for a number of exit points and vary from $16.74 to $32.8/1,000 cm depending on the exit point in question,’ notes CMS.