Ukraine approves law on partial ownership of its gas network by EU and US

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The Ukrainian parliament Friday passed the first reading of a bill that would allow US and EU investors access to 49 percent of the country’s gas transit system. The bill, rejected by lawmakers Thursday, was passed Friday with 229 “yes” votes, slightly above the required minimum of 226 votes. The bill gives foreign operators the right to “the management and/or concession or lease” of the gas pipelines and underground storage facilities, RIA reports.

The bill also allows Ukraine’s government to establish a company to operate underground storage facilities, in which American and European investors would be able to own up to 49%. The legislation was submitted for the parliament’s consideration on Wednesday, along with a bill introducing a state of emergency in the energy sector. Ukrainian Prime Minister Arseniy Yatsenyuk has declared several times that Kiev was ready to discuss the joint exploitation and modernization with investors from the EU and US.

Yatsenyuk said a number of European and US companies have already sent offers for the deal. The bill still has to pass a second reading. According to Ukrainian parliament Speaker Aleksandr Turchynov, the deputies will be able to amend the bill and the government will take the amendments into account. The leader of the nationalist Svoboda party Oleg Tyagnibok and several independent deputies insist that the shareholders of the gas transit system have to be approved by the parliament.

The bill introducing a state of emergency in the energy sector also passed its first reading on Friday. The bill is a response to Gazprom switching Ukraine to a prepayment system for gas deliveries. On June 16, Gazprom was forced to switch to a prepayment system for gas deliveries to Ukraine after talks on Kiev’s debt repayment and price revisions failed.

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