ENGIE has announced the creation of a subsidiary in Ukraine and signed an agreement with UkrTransGaz, Ukrainian transmission system operator, on gas transmission and storage, in the presence of Ukraine Prime Minister Volodymyr Hroisman and France Minister for the Economy and Finance Michel Sapin.
During the French-Ukrainian business forum held in Paris on October 28, ENGIE signed an agreement with UkrTransGaz. This agreement takes the form of a framework contract allowing ENGIE to reserve transport and gas storage capacities in Ukraine, starting this winter. This makes ENGIE the first European energy player to be actively involved in Ukraine's wholesale gas market.
The agreement dovetails with ENGIE's long-term commitment to Ukraine. In 2015, the Group became Ukraine's main Western supplier of natural gas, providing 3.5 billion m3 of gas, mainly to State-owned JSC Naftogaz of Ukraine, thus contributing to the country’s security and diversity of supply.
In summer 2016, ENGIE established ENGIE Energy Management Ukraine, a subsidiary intended to pursue the Group's growth on this very promising market. The subsidiary aims to develop a platform of sustainable and profitable activities for major industrial customers on the wholesale natural gas market (imports, transmission, storage, trade) and potentially as a second step on the electricity trade market.
Ukraine's gas market is the biggest in Eastern Europe, with 34 billion m3 consumed in 2015. Ukraine also joined the European Energy Union in 2010 and is engaged in significantly reforming its energy sector, paving the way for the liberalization of its national market (which began in October 2015) pursuant to the Third European Directive.
"ENGIE is cementing its position as a pioneer on energy markets undergoing liberalisation. By creating this subsidiary in Ukraine and signing the agreement with UkrTransGaz, ENGIE is showing that it is a long-term partner of the Ukrainian economy financing and development," says Edouard Neviaski, CEO of ENGIE's Global Energy Management Business Unit, which manages the Group's activities on energy markets. "ENGIE wants to consolidate its position as benchmark midstreamer in Europe," he adds.