Business news from Ukraine

UKRTRANSGAZ WANTS TO REVISE MODERNIZATION LOAN FOR UKRAINE’S SECTION OF URENGOY-POMARY-UZHGOROD GAS PIPELINE

Ukrainian gas transmission system (GTS) operator JSC Ukrtransgaz (UTG) has addressed the European Bank for Reconstruction and Development (EBRD) and European Investment Bank (EIB) with a request to revise current modernization loan agreements for Ukraine’s section of the Urengoy-Pomary-Uzhgorod gas pipeline. UTG said in its press release that one of the reasons for which it is unable to implement the loan program was the operator’s failure to meet the financial stability requirements outlined in the loan agreements with the EBRD and EIB (due to tariffs for its services which have been set too low since the end of last year).
The company added that reliability and effectiveness of the Ukrainian section of the Urengoy-Pomary-Uzhgorod gas pipeline could be improved with a significantly smaller amount of assets (than it is envisaged in the loan agreements).
“For this reason the company is asking the EBRD to reduce the amount of its loan as long as a EUR 125 million investment (instead of EUR 300 million) is sufficient for the achievement of its primary goals,” reads the statement.
UTG also asked the financial institutions to hold consultations with the Ukrainian government in order to determine the extent of liability on the loan agreements for UTG and a new GTS operator as well as the mechanism for use of funds and loan servicing after the completion of the unbundling process in Ukraine.
As reported, UTG signed a EUR 300 million loan agreement with the EBRD and EIB (EUR 150 million from each) for the modernization of Ukraine’s section of the Urengoy-Pomary-Uzhgorod gas pipeline. Ukrtransgaz will also invest EUR 166 million of its own funds in the project.
Ukrtransgaz, a 100% subsidiary of Naftogaz Ukrainy, operates Ukraine’s system of trunk gas pipelines and 12 underground gas storage facilities.

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POLAND READY TO CONNECT GAS PIPELINE TO UKRAINIAN GTS

Poland is ready to launch a gas pipeline with a transmission capacity of 2 billion cubic meters, which will connect the Polish gas transmission system (GTS) with the Ukrainian one in Hermanowice (Poland), the zn.ua (Mirror Weekly) ezine reported on Thursday.
“We are ready to launch the gas pipeline, if necessary, which will connect the Polish system with the Ukrainian one in Hermanowice. Its capacity is 2 billion cubic meters. This is not much, but when Ukrainians need urgent help, we are ready to provide it,” the publication said, quoting a representative of the Polish government for the strategic energy infrastructure Piotr Naimski.
He also said that Poland is waiting for a decision from the Ukrainian side.

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BURISMA TO INVEST UAH 60 MLN IN CONSTRUCTION OF NEW GAS PIPELINE IN KHARKIV REGION

Burisma Group, a gas producer, in January 2019 started building a gas pipeline that would connect Vodianivske and Karaikozivske fields in Kharkiv region and plans to invest UAH 60 million in the project, the company’s press service has reported.
The company expects that the new gas pipeline will allow boosting efficiency of operation and management of flows between the two fields. The length of the new gas pipeline will be 16.6 km.
Burisma Holdings controls Energy & Service Company Esko-Pivnich, LLC KUB-Gas, LLC Pari, the First Ukrainian Gas and Oil Company, SystemOilEngineering, Nadragas, Aldea-Ukraine, Burisma Service, Tehnokomservis, NadraGazVydobuvannia, GasOilInvest, and NGPGeo (Oil and Gas Industrial Geologia).
Mykola Zlochevsky is Burisma’s beneficiary.

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