OREANDA-NEWS. August 18, 2014. The Verkhovna Rada adopted in the second reading bill № 4116а "On amendments to the laws of Ukraine on reforming the management system of the gas transportation system of Ukraine" that stipulates for the modernization and operation of the Ukrainian GTS jointly with European and American partners.

The bill was designed and submitted to the Parliament by the Cabinet of Ministers of Ukraine.

The Prime Minister of Ukraine Arseniy Yatsenyuk, speaking on this issue at the session hall of the Parliament, stressed that pursuant to the law “the Ukrainian gas transportation system remains 100% state property".

In addition, the law envisages that "the Ukrainian government announces a public tender targeting to attract investors to participate in modernization and operation of the Ukrainian GTS". According to the Head of the Government, to be an investor, pursuant to the law, can only be a company from the European Union’s member country, the one having relevant certification, or from the United States of America. He explained: "The so-called operator company is controlled exceptionally by the Ukrainian state, at that 51% owned by the state, 49% can be received by the EU or the U.S.A.

Moreover, the Government, according to him, accepts an offer of the MPs to take a final decision on approval of the investors within the walls of the Verkhovna Rada of Ukraine. "The Constitution of Ukraine does not provide an extended interpretation of the parliamentary capacities to take such a decision, but I consider it a correct political decision. Governments change, presidents change, and to ensure a balance of powers in such a difficult issue it proves vital an additional control of the Verkhovna Rada of Ukraine", - said Arseniy Yatsenyuk.

Another issue requiring attention, according to the Head of the Government, is an offer to make information about a company public, the one that will participate in the tender for the modernization of the Ukrainian GTS: "During the competition, a company being a resident either of the EU or the United States, is obliged to disclose all the information about the property structure and all the beneficiaries being the owners of the company. It should be an essential condition”.

Besides, the Prime Minister of Ukraine noted, if a company winning the tender, decides to change its ownership structure, such a decision should be agreed with the Ukrainian side. "The motivation for the Government is clear and correct. It may happen that the winner is a company-resident of the EU, and after certain time it will change its ownership structure, and this ownership may happen to be of an aggressor country, for instance”. 

Furthermore, in order to provide the Parliament and the people of Ukraine with an opportunity to obtain reliable information about the activity of an investor company, they should issue reports, including also to the Verkhovna Rada of Ukraine, once in every 5 years.

According to Arseniy Yatsenyuk, the Government is well aware that additional requirements affect the bill: "There is no queue now to invest in the Ukrainian gas transport system. But we must take the first step to encourage the EU and the U.S., to obtain additional funds as investments, to make the EU interested in increasing gas transit via the territory of Ukraine and, respectively, to earn more funds together. And to ensure the European Union to be consistent. The sequence is as follows: if we are together, if we have signed the political section of the Association Agreement, this means we should help each other. And we do not build the South Stream that was designed exceptionally against Ukraine and is being built with the only purpose - to bypass Ukraine

The Prime Minister of Ukraine Arseniy Yatsenyuk also stressed that to diversify energy supplies it is viewed as important not just to ratify and sign the Third Energy Package, the EU and Ukraine have signed, but to implement it.

"So the goal of the law is to have the EU and the U.S. as operators of the Ukrainian gas transportation system in which Ukraine controls the company and where the ownership of the Ukrainian GTS and Ukrainian storages remains 100% in possession of the Ukrainian state. It won’t be simple to attract investors, but at least it gives an opportunity to launch political and economic negotiations with our western partners," - said Arseniy Yatsenyuk.