Europe`s Energy Community, an organisation seeking to liberalise the sector, provisionally accepted Ukraine as a member on Friday, a move that could help the country modernise its gas transit system, according to Reuters UK.
The group, created in 2005 to ensure close cooperation within the EU and neighboring countries, said Ukraine and Moldova would be able to join when and if they make their gas laws compliant with those of the European Union.
In January officials said they would work on bringing Ukraine into the group following the country`s gas dispute with Russia that cut off supplies to Europe and raised fears for energy security.
Europe receives a fifth of its gas from Russia via Ukraine.
"The accession of Ukraine and Moldova to the Energy Community Treaty will catalyze energy sector reforms in these countries, which will result in a mutually beneficial enlarged market based on common rules," European Union Energy Commissioner Andris Piebalgs said in a statement.
"This could in particular help Ukraine, an important transit country, to upgrade its infrastructure."
The accession agreement provides for easier trade and travel, some aid and strong economic cooperation. A key for Ukraine is attracting investment for EU countries to help modernise its gas transit system.
The European Union has also been generally keen to draw Ukraine away from the sphere of influence of its former Soviet master Russia, especially after last winter`s so-called gas war.
Earlier this week, the head of Russian natural gas giant Gazprom (GAZP.MM) sought to calm such fears amid a cold spell, saying he did not expect a new gas war with Ukraine to erupt over New Year.
Energy Community officials added that enlarging the Vienna-based organisation is an important part of the EU`s energy security goals.
"The gas crisis at the beginning of this year taught us all clear lessons," Slavtcho Neykov, director of the Energy Community Secretariat, said in a statement.
"Putting infrastructural and institutional setting concerns apart, following the treaty obligations in real terms is a challenge and Ukraine, which is a key gas partner, and Moldova have to be well prepared for it."