Naftogaz takes over three regional gas companies linked to Firtash

Naftogaz Group has taken over gas distribution companies in the Sumy, Vinnytsia, and Dnipro regions, which previously operated under the Regional Gas Company (RGC) brand associated with Ukrainian oligarch Dmytro Firtash.

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In a statement, Gas Networks, a company that is part of Naftogaz, said the state "is expanding the boundaries of the [gas distribution system] step by step".

On Wednesday, the companies changed their CEOs. Sumygaz is now headed by Anatolii Lynnyk, Vinnytsiagaz by Ihor Kvik, and Dnipropetrovskgaz by Oleh Melnyk.

Two companies that are part of Naftogaz are now responsible for those regional gas companies: Chornomornaftogaz manages the assets, while Gas Networks coordinates the work, forms the development strategy, and obtains licences.

Out of 20 regional gas companies of RGC, ten are already under the control of Naftogaz. The licences of three of them have already been re-issued to the branches of Gas Networks.

Regional gas companies, or gas distribution network operators (GDNs), provide gas distribution. There are just over 40 such companies across Ukraine, a natural monopoly. Usually, there is only one regional gas company in a region, but in some regions, two to four companies manage different sections of gas networks.

In May 2022, the Ukrainian government issued a decree allowing Naftogaz Group to manage stakes in a number of regional and municipal gas distribution companies.

Immediately afterwards, a Kyiv court seized and transferred the corporate rights of 26 regional and municipal gas distribution system operators to the asset recovery and management agency.

The Cabinet of Ministers later ordered the transfer of these seized assets to Naftogaz and established Gas Networks as the national gas distribution system operator.