The Petro Poroshenko Bloc has proposed that a coalition agreement should envision the reform of the energy sector in Ukraine.
“We will ensure the drawing of large-scale private investments in the energy sector. To increase our own production of gas, oil, and coal, we will diversify the sources of supplies of gas (not more than 30 percent of consumption per one supplier) and fuel for nuclear power plants in order to increase competition among suppliers and lower the level of monopolization and isolation of the Ukrainian energy market,” a draft coalition agreement published on Oct. 28 says.
The document also suggests the introduction of a rule starting 2018 under which no foreign company or country may supply more than 30 percent of Ukraine’s annual gas consumption.
“We will conduct structural reforms in the energy sector, which includes the liberalization of the gas and electric power markets, the reorganization of Naftogaz Ukrainy, and a transition to unified principles of pricing for gas and electric power for all groups of consumers in order to reduce the state’s expenditures and provide stimuli for saving them,” it says.
This is to be accomplished through increasing gas supplies from the EU via the North-South route, increasing Ukraine’s own production, including by decreasing or differentiating the payment for the use of subsurface resources, guaranteeing stability of the fiscal burden, developing non-traditional hydrocarbon deposits, and increasing energy efficiency.
Concerning the diversification of suppliers of fuel for nuclear power plants, most of which Ukraine receives from Russia, and services at various stages of the nuclear fuel cycle, the document does not contain quantitative restrictions.
It was reported earlier that Ukraine produces about 20 billion cubic meters of gas annually, which covers no more than 30 percent to 40 percent of its annual consumption. Russia’s gas monopoly Gazprom has virtually been the sole supplier of gas to Ukraine until recently. However, since 2013, Ukraine has secured a reverse flow of gas from the EU, making it currently the only supplier of gas to Ukraine, after Gazprom stopped all deliveries to the country in June.
Next year, the volume of reverse-flow gas deliveries from the EU to Ukraine could exceed 10 billion-12 billion cubic meters, which would decrease Gazprom’s share in Ukraine’s overall gas consumption to 40 percent.
