The Ukrainian parliament is showing a more and more active involvement in the process of creation of the international gas transport consortium. The parliamentary Committee on the Fuel and Energy Sector has announced plans to draft by the end of November a bill on the specifics of privatization of Ukraine’s gas transport system. The bill may be put to the vote as early as December. It will be recalled that the privatization of gas pipelines in Ukraine is presently forbidden under legislation. Meanwhile, experts estimate the market value of Ukraine’s gas transport system at over $20 billion.
The author of the bill, People’s Deputy Oleksandr Hudyma, stated that he plans to draw on the experience of Slovakia, which successfully sold a 49% stake in its gas transport system to an international consortium uniting Germany’s Ruhrgas AG, France’s Gaz de France, and Russia’s Gazprom. He believes that Ukraine’s government should also keep 51% of its gas pipelines and sell the remainder for some $10 billion to companies interested in joining the international consortium. The fact that the three partners in the Slovakian consortium are forbidden to sell or otherwise transfer their stakes merits special note. Thus, the interests of gas suppliers, transporting companies, and buyers are quite secure.
A company called the International Consortium to Manage the Gas Transport System was registered in Kyiv last year, but thus far has existed on paper only, with Ukraine and Russia each holding 50% stakes in it. Ruhrgas AG and Gaz de France have publicly expressed their readiness to join the company, but for unknown reasons their bids have not yet been considered. Fuel and Energy Minister Serhiy Yermilov stated that he believes Central Asian natural gas suppliers — especially Kazakhstan, Turkmenistan, and Uzbekistan — should be invited to join the consortium. But this idea was not well received by the Russians, who would not like Asian gas to get free access to European markets. Thus far, the major roadblock for the consortium is the ban on privatization or transfer the gas pipeline.
Parliamentary Fuel and Energy Sector Committee Chairman Andriy Kliuyev believes the bill on the specifics of privatization of the gas transport system might well be approved during the next parliamentary session. He thinks the bill has a good chance of passing the parliament. According to him, Verkhovna Rada needs only outline the key principles of future privatization. Meanwhile, the Cabinet of Ministers must set the terms for the tender. Mr. Kliuyev is convinced that there is a need to simultaneously draw up a bill, On Concessions, under which management of the gas transport system could be transferred to the international consortium but not sold. The parliamentary Committee on Economic Policy plans to bring this bill to a vote at the next session. Notably, deputy Oleksandr Hudyma is also among its authors. Obviously, when Verkhovna Rada outlines the rules for privatization and transfer of gas pipelines, the Cabinet of Ministers will have to decide which option best meets Ukraine’s interests.
Mr. Hudyma, a member of Our Ukraine, is confident that privatization and transfer of gas pipelines will be the province of “the next government and president.” Meanwhile, committee Chairman Andriy Kliuyev of the Party of the Regions believes that the parliament can approve the bills soon, the election campaign and the risk of a new premier being appointed notwithstanding. The committee plans to hold a Government Day in Verkhovna Rada in November dedicated to the gas consortium. Obviously, it will show what lies in the offing for Ukraine’s pipelines.
