MPs submit bill on gas pipeline ownership reform

24 September 2022, 12:23 PM
Deputies want to liquidate the Main Gas Pipelines of Ukraine (

Deputies want to liquidate the Main Gas Pipelines of Ukraine (

MPs from the ruling Servant of the People Party and the opposition Batkivshchyna party have submitted a bill that would liquidate the parent company of Ukraine’s gas transmission operator, Gas TSO of Ukraine (GTSO), according to the bill’s description on Ukraine’s parliamentary website on Sept. 22. 

Draft law No. 8060 would merge JSC "MAHISTRALNI GAZOPROVODY UKRAINY” (MGU) with GTSO – MGU currently is the sole owner of 100% of GTSO shares.

"The bill was developed with the aim of providing legal regulation of the one-time special procedure for the accession of the JSC ‘MAHISTRALNI GAZOPROVODY UKRAINY’ to the LLC ‘Gas TSO of Ukraine’, and is meant to eliminate the complex two-level management system of the gas transmission system of Ukraine," the bill’s explanation reads.

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This two-tiered management system arose out of assumptions made during the unbundling process involving Naftogaz, Ukraine’s national fossil fuel company. According to EU regulations, which Ukraine was attempting to synchronize with, a nation’s gas transmission system cannot be owned and operated by the national fossil fuel company. As a result, Naftogaz had to relinquish its control over Ukraine’s gas transmission system. MGU was created to be the gas transmission operator – but GTSO was created as part of the unbundling process as well, and inherited the gas transmission system operating duties from Ukrtransgaz, a Naftogaz subsidiary. In order to ensure GTSO’s independence from Naftogaz, ownership of the GTSO was given to MGU.

All of MGU’s assets would be transferred to GTSO as a result of the merge, the bill notes, while the 100% ownership stake would be transferred to the state directly.

MGU won’t be completely eliminated – one aspect of the company that would be preserved following the merger is its supervisory board, which would be incorporated into GTSO’s charter, the bill reads. The board’s composition, size, and structure would be unchanged from its MGU incarnation.

On Sept. 16, MGU terminated the duties of GTSO General Director Serhiy Makohon, who says he learned about the dismissal while on a business trip, and was not provided an explanation for the decision.

Paweł Józef Stańczak, who had previously overseen the creation of Poland’s independent gas transmission operator and has served as president of Ukrtransgaz, has been tapped as the new General Director, according to the state registry of legal entities.

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