Cabinet plans to hand OGTSU's gas-fired generation to Naftogaz
The Cabinet of Ministers approved a plan to separate the electricity generation business of LLC Gas Transmission System Operator of Ukraine (GTSOU). The generating assets are to be transferred to a new company, 100% of whose corporate rights will belong to the state, and the company itself is subsequently planned to be handed to NJSC Naftogaz of Ukraine. This is set out in Government Resolution No. 1155 of 9 September 2026.
The new company will be created by carving out part of GTSOU's property, rights and obligations. The Ministry of Energy was to ensure by 22 September a decision on its creation, preparation of the separation balance sheet and the transfer-acceptance act, and designation of the bodies responsible for the spin-off procedure. As reported earlier, GTSOU set up a separate branch, Gas Turbine Energy Company, earlier this year to generate electricity from natural gas.
Deadlines and steps
By 31 October, GTSOU must carry out an inventory of the property, rights and obligations related to electricity generation and an independent valuation of the relevant fixed assets. The new company is planned to be registered by 30 November.
Separately, GTSOU and the Ministry of Energy must identify state property used for electricity generation that is not needed for gas transportation. It will be transferred to the new company within 30 days of its registration.
By the end of 2026, the new company must become GTSOU's successor under contracts for goods, works and services needed to operate the generating facilities. A gas transportation contract and a technical agreement on gas acceptance and transfer are also to be concluded, and contracts with distribution system operators, Ukrenergo, GTSOU and other market participants re-executed.
The plan calls for a draft government act on transferring 100% of the new company's shares or stakes to Naftogaz to be submitted by 31 January 2027. The government also instructed the preparation of draft laws on separating GTSOU's generation and corresponding amendments to the Tax Code and the Law on Public Procurement. NEURC and the Energy Community Secretariat must be informed of the plan's implementation by 21 December.
Why generation is being separated
GTSOU was granted a temporary right to generate electricity from natural gas because of a shortage of generating capacity after Russian attacks. The validity of that right is limited to 1 January 2027, which created the need to separate generation from gas transportation.
According to industry analysts' estimates, GTSOU has the largest installed gas generation capacity in Ukraine: 9 units with a combined capacity of over 240 MW in six regions. By comparison, the Naftogaz Group has 7 units with a combined 51.6 MW in four regions.