On 13 April 2012 the Ukrainian Parliament adopted the Law "On Amendments to the Law of Ukraine "On Pipeline Transport" with Regard to the Reform of the Oil and Gas Complex" (hereinafter – the "Law"), which became effective on 6 May 2012.

The Law was adopted as part of the implementation of the Protocol on the Accession of Ukraine to the Energy Community, as signed on 24 September 2010 and ratified on 15 December 2011 by Ukraine (hereinafter – the "Protocol"). The Law provides for the reorganisation of National Joint-Stock Company "Naftogaz of Ukraine", an energy company entirely owned and run by the State which holds and manages the Ukrainian gas transportation system (hereinafter – "Naftogaz").

In particular the Law allows:

  • the reorganisation (merger, accession, separation, spin-off, transformation) of any state-owned companies engaged in the storage and transportation of hydrocarbons through the national gas transportation system, including Naftogaz and its subsidiaries. This is subject to prior approval by the Cabinet of Ministers of Ukraine and to compliance with the national obligations as accepted by Ukraine under the Protocol.

  • the disposal of fixed assets by any state-owned companies engaged in the storage and transportation of hydrocarbons through the national gas transportation system, including Naftogaz and its subsidiaries. This is also subject to prior approval by the Cabinet of Ministers of Ukraine, provided, however, that such fixed assets are not used for the storage and transportation of hydrocarbons through the national gas transportation system.

The privatisation of any state-owned companies engaged in the storage and transportation of hydrocarbons through the national gas transportation system, including that of Naftogaz and its subsidiaries, is still prohibited, as is the privatisation of any legal entity resulting from the reorganisation of such storage and transportation companies pursuant to the Law.

Law: the Law of Ukraine "On Bringing Amendments to the Law of Ukraine "On Pipeline Transport" with Regard to Reform of the Oil and Gas Complex" dated 13 April 2012, No 4658-VI.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 14/05/2012.