Ukraine court cancels Naftogaz exclusivity in gas supply to large consumers

An administrative court ruled to cancel the Ukrainian government’s Nov. 26 resolution that made state holding Naftogaz the exclusive supplier of natural gas to 168 of the biggest consumers in Ukraine, the Interfax-Ukrayina news agency reported on Dec. 17, citing one of the plaintiffs, a private gas producer.



The Cabinet resolution prohibited 168 of Ukraine’s largest gas consumers from buying from any other supplier except Naftogaz between Dec. 1, 2014 and Feb. 28, 2015. The resolution was challenged in court by Ukrainian private gas producers, who lost the ability to sell natural gas to their clients and even related parties. The Energy Community of Europe also requested to cancel it.



Alexander Paraschiy: The ruling looks only slightly encouraging for private gas producers operating in Ukraine – JKX Oil & Gas (JKX LN), Serinus Energy (SEN PW) and Regal Petroleum (RPT LN) – as well as energy holding DTEK (DTEKUA). This is by no means a final victory of private gas producers, as the court ruling can be appealed within the next two weeks.



We are sure that the government will appeal, as it looks ready to do its best to ensure the restrictions on the gas market remain in place. The restrictions are “the only way to secure the financial liquidity of Naftogaz in today’s conditions”, according to an interview of Ukraine’s Energy Minister Volodymyr Demchyshyn published in the Kapital newspaper on Dec. 17. The appeal, which private gas producers are very likely to win, can potentially last until the end of the winter, when the Nov. 26 decree expires. Interestingly, in his interview Demchyshyn estimated that the restrictions will be cancelled no later than March.



Recall also that the Nov. 26 resolution was the second and stricter version of resolutions adopted in early November, which granted the exclusivity to Naftogaz. It means it will cost nothing for the government to repeat the resolution one more time, in some adjusted form, if it loses the appeal before the end of February.

Источник: Конкорд Капитал