The EU Energy Union Strategy of 25 February 2015 provides for the update of the Strategic Energy Partnership with Ukraine. Renewed partnership foresees the cooperation on the issues related to the importance of Ukraine as a transit country, as well as on reforming Ukraine's energy market, upgrade of the gas network, creation of the appropriate regulatory framework for the electricity market and energy efficiency in Ukraine as a means of reducing dependence on energy imports.
According to this strategy the updated Memorandum has been signed on 24 November 2016. The goal of the MoU is the full integration of energy markets of the EU and Ukraine for the benefit of consumers and with a view to strengthening mutual energy security and environmental sustainability.
Acknowledging the importance of developing Ukraine’s energy infrastructure and implementing projects aimed at deepening its integration into the EU’s infrastructure, the Sides agree to cooperate in mobilizing investments and financing.
Ukraine and the EU aim to collaborate in view of aligning their respective energy strategies and expanding the instruments of cooperation between them in the following areas: energy security, solidarity and trust; integration of the energy markets; enhancing energy efficiency; decarbonisation of the economy; research and innovation.
Regular meetings at the ministerial level (and other levels where appropriate) are foreseen to review progress in the implementation of the Memorandum and to define priorities through annual work plans.
The Annual Work Plan 2017 implementing the EU-Ukraine Memorandum of Understanding can be found at the Ministry of Energy and Coal Industry of Ukraine web page http://mpe.kmu.gov.ua/minugol/control/uk/publish/article?art_id=245260150&cat_id=162176.
Memorandum is made for an initial period of 10 years, with the possibility of its revision and prolongation.
In November 2018, representatives of Poland and Ukraine jointly presented the initiative to establish the Eastern Partnership LNG Network to assess the LNG opportunities for the Eastern Partnership countries. The initiative was supported by the majority of EU member states as well as by EaP countries. The kick-off event and first workshop of the sub-sectoral networking group on LNG markets will take place on February 19-20, 2019 in Warsaw.
Integration of electricity and gas markets
In the context of the energy markets integration work is being carried out on the project “Research of the possible synchronous interconnection of Ukrainian and Moldovan power systems to ENTSO-E Continental European Power System”.
On June 28, 2017 the “Agreement on the conditions for the future integration of power systems of Ukraine and Moldova with the grid of continental Europe” was signed in Brussels.
On July 7, 2017 the Agreement came into force after being signed by the system operators of the ENTSO-E Regional Group “Continental Europe”.
For Ukraine this event opens the way to the next phase of the integration of the United Energy System of Ukraine into a European association – the practical implementation of a Catalogue of Requirements, the unconditional implementation of which is necessary for making a decision on the power systems integration.
On 15 November, the representatives of SE NPC Ukrenergo and SE Moldelectrica agreed and signed final appendices to the Operation Agreement on parallel operation in the joint control unit Ukraine – Republic of Moldova.
The signing of these documents means the finalisation of preparation of the Operation Agreement on the establishment of the control unit within the power systems of Ukraine and the Republic of Moldova.
Operational agreement on parallel operation in the joint control unit Ukraine – Republic of Moldova is a contractual basis that ensures the parallel operation of transmission system operators. This document is drafted within the framework of the Action Plan on synchronization of Ukraine and Moldova energy systems with the ENTSO-E.
On November 29, 2018, the Council of Ministers of the Energy Community approved a list of projects of mutual interest (PMI) with Ukraine in the field of electricity submitted by Ukrenergo one year ago for consideration. Projects of common interest of Ukraine and the Energy Community are aimed at increasing intergovernmental flows of electricity with neighbouring European neighbours of Ukraine – Slovakia and Romania. Their implementation will allow for maximum power exchange of electricity with EU countries after synchronization with ENTSO-E.
In particular, the status of PMI projects was granted to the following projects:
- a project to upgrade the 400 kV Mukacheve – Veľké Kapušany overhead line with an increase in interconnector capacity from current 700 MW to 1000 MW.
- a project for the construction of a 750/400 kV ‘Prymorska” substation with Prymorska-Isakcha doublecircuit line. The implementation of the project will increase the capacity of the interconnector with Romania to 1000-1200 MW after 2026.
In 2014, important progress was made with respect to the transparency in gas sector in Ukraine, with the weekly publication of the gas storage levels and daily reporting on the volume of natural gas transported through the gas transportation system (GTS) of Ukraine by PJSC Ukrtransgas. Starting 21 November 2014 PJSC "Ukrtransgaz" has been publishing daily gas transmission data on the ENTSO-G transparency platform.
On April 9, 2015 the Verkhovna Rada of Ukraine adopted the Law "On natural gas market in Ukraine", which is a result of Ukraine – EU joint work and is an important step towards Ukraine’s integration to the European Union. This document makes Ukraine’s natural gas market transparent and understandable to investors and establishes the rules set out in the EU Third Energy Package at the Ukrainian market.
On July 9, 2015 in Dubrovnik Ukraine signed Memorandum of understanding on a Joint approach to address the natural gas diversification and security of supply challenges as part of the Central and South-Eastern European Gas Connectivity (CESEC) initiative.
On September 28, 2017 the Memorandum of Understanding (MoU) expanding CESEC's scope beyond gas into electricity markets, energy efficiency and renewable development was signed in Bucharest. The intentions set out in the new MoU are fully in line with the provisions of the Energy Strategy of Ukraine for the period up to 2035 "Security, Energy Efficiency, Competitiveness", adopted in August 2017.
Enhancing security of energy supplies and transit of hydrocarbons
During 2014 – 2017 consultations with European partners on the organization of natural gas supplies from Europe to Ukraine have been intensified.
On 28 April 2014, Ukrtransgaz and Eustream, the Slovakian TSO, signed a memorandum of understanding facilitated by the European Commission. The document set out the intention of the parties to enable unrestricted bidirectional gas flows between Slovakia and Ukraine, including physical and virtual gas flows at all pipelines interconnecting the two countries.
On 2 September 2014, a new gas pipeline for physical supply from Slovakia to Ukraine was launched.
In December 2014, Ukrtransgaz and GAZ-SYSTEM S.A., the Polish TSO, signed a cooperation agreement to integrate the gas transmission systems of the two countries. The implementation of the agreement would result in an increase of gas flow capacity from Poland to Ukraine by 8 bcm/year to 9.5 bcm/ year.
On 29 May 2015, Ukrtransgaz and FGSZ, the Hungarian TSO, signed a direct interconnection agreement. It was the first agreement between the TSOs of Ukraine and an EU member state which fully complies with the EU energy legislation. This agreement is the first step for Ukrtransgaz to establish the comprehensive and unobstructed cooperation with its neighbouring TSOs.
On 20 July 2016 gas network operators of Ukraine and Romania signed an interconnection agreement. This agreement is a crucial step towards opening the Trans-Balkan pipeline system between Greece and Ukraine to transport gas and trade in line with EU rules. The agreement has been signed within the framework of the Central and South Eastern Europe Gas Connectivity initiative.
On 9 September 2016 the Memorandum of Understanding was signed by the TSOs from Ukraine, Romania, Bulgaria and Greece on reverse flows on the Trans-Balkan pipeline within the framework of the Initiative on Central and South-Eastern European Gas Connectivity.
On April 10, 2017 Ukraine’s Naftogaz and Ukrtransgaz, Italy’s Snam and Slovakia’s Eustream have signed a Memorandum of Understanding aimed at jointly evaluating opportunities for collaboration in the operation and enhancement of the gas transmission system (GTS) in Ukraine. The Memorandum was signed in the presence of the EC Commissioner for Climate Action and Energy M.-A. Cañete. It is aimed at maintaining the quality of natural gas transmission in Ukraine, in line with the standards of European markets, ensuring that the Ukrainian GTS is operated in a safe and efficient manner and is accessible on a transparent and non-discriminatory Third Party Access basis, in compliance with the applicable legislation.
In the context of the implementation of the Polish-Ukraine interconnector gas pipeline project, as of July 2018, GTS operators in Ukraine and Poland, JSC Ukrtransgas and GAZ-SYSTEM SA completed the procedure for assessing demand for the capacities at the Ukraine-Poland border in both directions.
The results of the non-binding assessment are a solid basis for further joint analysis and research on the development of infrastructure between the GTS of Ukraine and Poland, which, in turn, will provide the basis for deciding on the next step - a potential binding procedure for the allocation of capacity.