On 1 November 2016 the Law of Ukraine "On Amendments to the Law "On the Natural Gas Market (regarding gas stock reserve)" No. 1541-VIII (the "Law"), adopted by the Parliament on 22 September 2016 and signed by the President of Ukraine on 13 October 2016, became effective. The Law is aiming to reduce the burdensome 50 per cent natural gas stock reserve obligation, which according to the latest Energy Community Implementation Report, dated 1 September 2016, is "considered not proportionate or in line with ensuring equal access".
The Law states that any supplier shall secure natural gas stock reserve of up to 10% of the planned monthly supply volume. The exact amount of the natural gas stock reserve is established on annual basis by the Cabinet of Ministers of Ukraine for all suppliers.
It is important to note that as of 1 November 2016 the Cabinet of Ministers has not established the amount of the gas stock reserve for the next year. However, on 28 October 2016 the Ministry of Energy and Coal Industry of Ukraine proposed to the Cabinet of Ministers of Ukraine to establish obligation for the gas suppliers to create a gas stock reserve at the amount of zero per cent for 2016-2017. According to the respective Draft Cabinet of Ministers of Ukraine Resolution, which has been published at the official page of the Ministry of Energy and Coal Industry of Ukraine, the gas suppliers will be obliged to create natural gas stock reserve in the amount of 10 per cent of monthly supply volume only in cases of emergency.
Market participants believe that the recently adopted Law is a substantial step towards establishment of competitive rules on the Ukrainian gas market.
For further information please contact Asters' counsel Yaroslav Petrov.