Statement following the meeting between Vice President Šefčovič and Ukraine's Foreign Affairs Minister Klimkin

The European Commission Vice President for the Energy Union Maroš Šefčovič and Ukraine's Minister for Foreign Affairs Pavlo Klimkin held a bilateral meeting focused on the ongoing trilateral talks with Russia and Ukraine on the long-term transit of gas to Europe and the unbundling of Gas Transmission System Operator of Ukraine. Minister Klimkin also gave an update on the Azov Sea incident, with Vice President Šefčovič recalling the EU's immediate response to the dangerous increase of tension in the area and referring to the EU statement from 28 November.

Vice President Šefčovič has recognized Ukraine's very constructive engagement in the trilateral talks so far, which confirms that the future framework for gas transit to the EU is of vital importance to Ukraine. Both sides have expressed their intention to hold a next trilateral meeting at the political level early next year, possibly preceded by a technical meeting involving experts.

Regarding the unbundling of the gas transmission operation in Ukraine, Vice President Šefčovič has welcomed Minister Klimkin's strong commitment to the process. An independent and trusted gas transmission system operator is a cornerstone of the future transparent and efficient gas market in Ukraine and the best guarantee for market players to engage in a sustainable gas transit after 2019. Vice President Šefčovič has also welcomed that achieving a decisive progress on unbundling in the coming months is a mutually agreed goal of the European Commission, Ukraine's government, Naftogaz and of the international donors' community.  

''I am hopeful that this shared objective and agreement between the Ukrainian side and the key stakeholders is a game-changer. It gives a new dynamic to the process and it will allow for smooth preparations to establish a new transmission system operator in Ukraine by January 2020. In this respect, I appreciate a constructive cooperation of Naftogaz which is essential so that all necessary steps in the unbundling process are timely and efficiently implemented. The Commission stands ready to assist in this process in the coming weeks and throughout 2019, as this is also a crucial element of the trilateral gas talks. Their successful outcome, namely a continued, long-term transit of gas through Ukraine to the EU in a reliable and commercially viable way is of utmost importance for the EU's energy security.''   

Background

Following an October joint letter by the European Commission, the US State Department, the Energy Community Secretariat, the World Bank and the EBRD highlighting the urgency of unbundling, the Commission convened a meeting of all stakeholders supporting reforms of the Ukrainian gas market on 29 November. At the meeting, attended also by the representatives of Naftogaz, PJSC Ukrtransgaz and PJSC Mahistralni Gazoprovody Ukrayiny (MGU), a common action plan on the next steps of unbundling was agreed. Based on the agreed course of action, Naftogaz has committed to develop by the end of January 2019, in cooperation with MGU, a necessary contractual framework for the establishment of a certified transmission system operator in line with the Ukrainian legislation and the Third Energy Package. The legal framework should be implemented in the early months of 2019. This will also require close involvement of the Cabinet of Ministers to ensure full unbundling by 1 January 2020.