Naftogaz Pressuring Six Gas Distribution Companies

On Friday, the managers of six gas distribution companies, Zakarpatgaz, Chernivtsigaz, Chernihivgaz, Volyngaz, Ivano-Frankivskgaz and Lvivgaz, claimed that they were being harassed by the Ministry of Internal Affairs as part of a scheme to force them to sell their assets to RosUkrEnergo. In response, Naftogaz of Ukraine linked the police pressure to the appropriation of USD 14 mln by the companies’ managers. Additionally, Naftogaz announced that it was going to stop leasing regional gas distribution networks to those Oblgazes connected to the scandal. Alexander Paraschiy: Naftogaz’s threat to stop leasing gas distribution networks looks like a bluff, as the gas distribution companies partially own the networks they use. The pressure these companies are facing is most likely linked to an attempt by Naftogaz to buy these companies in order to sell them to RosUkrEnergo, as the Minister of Fuel and Energy said he hoped to do in September (refer to our news of Sep. 7). The pressure may force the owners of these companies to sell the companies cheap.