NJSC Naftogaz Ukrainy in 2020 plans to create an exchange to trade with gas, Head of Naftogaz integrated gas business unit Andriy Favorov has said.
“Our idea, our strategy, is that next year we will create an exchange where Naftogaz will act as a buyer and seller of gas,” he said in an exclusive interview with Interfax-Ukraine.
According to him, the decision has already been approved by the board and the supervisory board of the company. The required preparatory work is ongoing to launch the exchange. In particular, a tender was held to implement the ETRM (Energy Trade Risk Management) system, which will take into account all transactions and market fluctuations.
“The introduction of this system will give us the required tools to control commercial risks,” Favorov said.
NJSC Naftogaz Ukrainy has reduced the price of gas for households and heating companies by 13% in December compared with the price in November, to UAH 4,277 per 1,000 cubic meters (excluding VAT, transportation costs and gas sellers’ margins), the company said in a press release.
“Despite the fact that according to the results of exchange trading, the market price of gas in the Ukrainian market did not decrease over the past month, the regulated price in December 2019 decreased in accordance with the declared value of gas cleared in November,” Naftogaz noted.
The company noted that this price level is not market and is determined according to the formula established by the Cabinet of Ministers in its resolution No. 293. In particular, according to the document, the population and heating companies purchase gas at the minimum of four prevailing in the market value: the average import price according to the Ministry of Economic Development and Trade, the price of Naftogaz Ukrainy for industry, the average weighted price at the auctions on the Ukrainian Energy Exchange, PSO under resolution No. 867. This mechanism of social price formation is valid until the end of 2019. From January 1, 2020, in accordance with agreements with the International Monetary Fund, Ukraine will switch to market pricing for household consumers.
The Cabinet of Ministers of Ukraine will conduct an audit of the financial statements of NJSC Naftogaz Ukrainy, MP Oleksiy Honcharenko has said.
He posted a photocopy of a government resolution on his Facebook page that says that at its meeting on Wednesday, the Cabinet approved the appointment of Deloitte & Touche Ukrainian Services Company (USC) as a subject of auditing activities to provide services of the mandatory audit of financial reporting.
NJSC Naftogaz Ukrainy has approved the creation of Naftogaz Oil Trading LLC in the oil division of the group, which will be engaged in trade with oil and petroleum products.
The decision of the shareholders – Ukrtransnafta – dated October 3, 2019 was posted on the website of the oil transmission network operator of Ukraine.
The directorate of Ukrtransnafta is to take the required measures to register Naftogaz Oil Trading LLC and ensure its further functioning.
The European Bank for Reconstruction and Development (EBRD) has acquired one-fifth (for EUR 120 million) of five-year eurobonds issued by Naftogaz in the amount of EUR 600 million, the bank has said.
“The eurobond proceeds are issued for general corporate purposes including the financing of gas purchases. The bank’s financing will be used exclusively for gas purchases. The transaction will contribute to Ukraine’s energy security, ensuring procurement of natural gas for the upcoming 2019/2020 winter heating season in the country,” the bank said on its website.
As reported, on July 12 Naftogaz Ukrainy placed two tranches of eurobonds denominated in euros and U.S. dollars: EUR 600 million for five years at 7.125% and $335 million at 7.375% per annum for three years. The anchor investors of the issue were the EBRD and a number of U.S. investors. The initial benchmark yield of dollar eurobonds was about 7.75%, eurobonds in euros about 7.5%.
Earlier, Naftogaz announced the need to urgently raise funds for the accumulation of increased volume of gas in storage facilities for winter – 20 billion cubic meters to be ready for a possible termination of transit by Gazprom from January 1, 2020 and strengthen its position in negotiations with the Russian gas monopoly.
JSC Ukrtransnafta has transferred 100% of its net profit in the amount of UAH 1.463 billion for 2018 in dividends to Naftogaz Ukrainy.
The press service of the company said last year the company also sent 100% of its net profit for 2017 in the amount of UAH 2.139 billion to pay dividends.
As reported, Ukrtransnafta in 2018 reduced its net profit by 31.6% (by UAH 676.454 million) compared to 2017, to UAH 1.463 billion. Net sales income rose by 2.3%, to UAH 3.873 billion, while gross profit decreased by 21.2%, to UAH 1.452 billion.
In 2018, Ukrtransnafta transported 15.436 million tonnes of oil, including 13.335 million tonnes in transit to European refineries, 1.344 million tonnes of domestic oil and 680,500 tonnes of imported oil to the refineries of Ukraine.
Ukrtransnafta, 100% managed by NJSC Naftogaz Ukrainy, is the operator of the oil transportation system of Ukraine.
