Business news from Ukraine

“Naftogaz” has identified more than 500 filling stations where it is possible to refuel in case of blackout

579 filling stations of the U.GO and Ukrnafta brands, which are part of Naftogaz group, have the appropriate equipment and are ready to operate in case of a blackout, the company said in a press release on Friday.
“Gas stations are represented in 20 regions of Ukraine and Kiev,” the group said.
A full list of gas stations can be found on Naftogaz Group’s Power Drive website: fill up at U.GO and Ukrnafta gas stations even in blackout conditions | Naftogaz Ukrainy (naftogaz.com).
“The enterprises of the Naftogaz group do everything possible to support Ukraine and the Ukrainians during the war. So we will be glad to see you at U.GO and Ukrnafta gas stations equipped with generators, which are ready for any possible challenges,” Oleksiy Chernyshev, chairman of the board of Naftogaz Ukraine, was quoted in the press release.
As reported, Naftogaz Oil Trading (a subsidiary of the NJSC) as of November 2022 launched 46 gas stations under the brand U.GO on the basis of assets of the arrested network Glusco, which consists of 126 gas stations
“Ukrnafta owns 85 special permits for the production of hydrocarbons. On its balance sheet there are 1,809 oil and 153 gas wells. The company owns 537 petrol stations, of which 449 were in operation at the beginning of December 2022. The controlling stake in the company belongs to Naftogaz of Ukraine, while the minority stake (about 42%) was held by Igor Kolomoysky and Hennadiy Boholyubov’s structures before the withdrawal.

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Naftogaz of Ukraine board chairman discusses gas purchase and production development with Norwegian Equinor

Naftogaz of Ukraine CEO Alexei Chernyshev and Norwegian Equinor CEO Anders Opedal met Friday to discuss gas purchases and potential development of Ukrainian production, the NJSC press service said.
“We have the first agreements with Equinor on the purchase of additional gas volume to pass the most difficult heating season in our history. We hope for special terms of purchase and further reservation of the volume we need,” Chernyshev said in a statement.
In addition, the head of Naftogaz on December 1 discussed with Norwegian Ambassador Erik Svedal the involvement of technology Norwegian oil and gas business and financing the purchase of additional volume of gas needed for Ukraine to pass the winter, given the constant Russian rocket terror.
“At a time when Russia is using the destruction of energy infrastructure as a weapon, support for Ukraine’s energy sector is as important as military support. We look forward to Norway’s continued assistance in this context,” Chernyshev said.
According to the press service, the ambassador said that he expects to increase the announced amount of aid to his state, and future funding will also be allocated to ensure energy security of Ukraine.
As reported, Norway will provide Ukraine with funding of NOK 2 billion (about $195 million) for the purchase of natural gas in winter 2022. Norway plans to use the European Bank for Reconstruction and Development (EBRD) as a channel to support gas purchases in Ukraine, while Naftogaz will be a formal recipient of the fuel.
Previously, the Norwegian prime minister said that the kingdom would provide Ukraine with an aid package worth 1bn euros.

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City Council of Zhytomyr will allocate a place to Naftogaz for construction of a bio-CHP

At its meeting on Monday, October 24, the Zhytomyr City Council plans to allocate land plots for the construction of two bio-CHP plants planned by NJSC Naftogaz Ukrainy, Mayor Sergei Sukhomlin said.
“On Monday we are holding an extraordinary session, providing land plots for the construction of large bio-CHPs in Zhytomyr. Many thanks to Naftogaz. It has already ordered equipment, memorandums on construction have been signed with it,” he said during the Energy Club discussion on Thursday.
According to him, these CHP plants, which will also operate on RDF (Refuse Derived Fuel, fuel from waste after sorting – ER), produced at a recently opened waste processing plant, will provide an opportunity to receive 15 MW of electricity for the city and reduce gas consumption in the OZP up to 5 million cubic meters m, while 43-45 million cubic meters are planned for 2022. m, and in 2015 consumption was 97 million cubic meters. m.
At the same time, the mayor noted that several additional quarterly local boiler houses on wood chips have already been put into operation in the city this year, and the thermal power plant that was opened last year on this raw material additionally supplies 1.1 MW of electricity to the network.
“In conditions when Zhytomyr was completely de-energized as a result of Russian missile attacks on October 18, this helps a lot,” Sukhomlin concluded.
At the same time, he said that the city authorities, over the past two days after the enemy strikes, developed a plan to provide critical enterprises with energy resources, in particular, with the help of generators.
“We have allocated funds. Now we urgently buy high-power generators in Turkey,” Sukhomlin said.
He explained that these generators will be used to power the water utility, the main 600 kW sewerage station and 26 pumping stations.
“At least in this case, we will supply water, hourly, but we will,” the mayor assured.
In addition, he said that approximately the same plan with generators is designed for heat communal energy, which includes 10 district and 32 quarterly boiler houses, in particular, the city will have about five or six teams with generators of 250 kW, which will include quarterly boiler houses for four to five hours to warm up the system.
“We are working on this system so that the city does not remain without heat and water, because a potbelly stove in every apartment in a multi-storey building is a terrible picture,” the mayor noted.
According to him, in extreme cases, in each microdistrict of the city, according to the developed plan, there should be large heating points located, for example, in kindergartens or schools where there are autonomous boilers.
“We faced completely new challenges. We simply counted on savings. And when the system cannot work because there is simply no electricity, we were not ready for this,” the mayor stressed.
As reported, in Zhytomyr on October 18, as a result of strikes inflicted by Russian invaders, electricity and water supply stopped working. As the mayor Sergei Sukhomlin reported, the city remained completely de-energized and deprived of water supply for an hour, hospitals worked on backup power.
During the day, according to him, 25-30% of the city is connected to electricity, but the capacity is still not enough for the full operation of the water supply and sewerage.
Sukhomlin said that it is still difficult to assess the extent of the damage and, accordingly, how long it will take to completely eliminate the consequences of the strike, while noting that everything depends on the issue of capacity.
At the end of September, Sukhomlin announced the opening of the first waste processing plant in Ukraine, suspended at the beginning of the war, tentatively in the next few weeks.
He noted that the volume of RDF raw materials, which can be produced from waste produced by the city and used for heat production, can replace 20 million cubic meters. m of natural gas per year.
According to information on the website of the Zhytomyr City Council, the capacity of the waste processing plant, the construction of which began in May last year, is 0.5 million cubic meters. m per year.
In early October, Naftogaz announced that it had begun preparatory work for the construction of thermal power plants that will run on biomass (wood chips) and RDF in Lvov and Zhytomyr. The planned period for putting objects into operation in Lviv is the first quarter of 2023, in Zhytomyr – the fourth quarter of 2023.
In total, Naftogaz intends to build at least nine thermal power plants and bio-boiler houses in eight regions of Ukraine with a total capacity of 250 MW of thermal energy and 52 MW of electricity.

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Naftogaz in Lviv is implementing a project for construction of a thermal power plant on wood chips for UAH 1 billion

NJSC Naftogaz of Ukraine is implementing in Lviv, together with the city council, a project for the construction of a CHP plant on wood chips, which is planned to be put into operation by February 2023.

“I am sure that by February the CHPP will be operational. It will take a few months instead of a year and a half. NAC helps with the implementation of this project both in financing and in development. several months,” Naftogaz head Yuriy Vitrenko said at a briefing during a visit to the Lviv region on Friday.

As the correspondent of “Energoreforma” reports, according to Vitrenko, the NAC, which is implementing a number of similar projects in Ukraine, is ready to support other cities in this direction. ‘We have an interest in investing in such projects in order to import less gas at enormous prices. The implementation of such projects is beneficial both economically and in terms of ecology,” Vitrenko explained.

At the same time, he noted that both the Lviv authorities and the NAC itself also have a number of agreements in order “to then attract funds from IFIs for such projects.”

Lviv Mayor Andriy Sadovoy noted that this would be the city’s first powerful thermal power plant running on alternative fuels, which would cover about a quarter of its heat needs. “We planned such a project with the EBRD for a long time, but according to their classical procedures, we could only start it next year. But the Russian aggression intensified the thought process so much that we came to an agreement with Naftogaz,” Sadovoy explained.

According to him, the participation of the national company, which is the market leader, gives more opportunities and priorities, including in obtaining equipment.

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State-run Naftogaz fails to obtain consent of eurobond holders to defer payments

NJSC Naftogaz Ukrainy failed to obtain consent to a two-year deferral of interest payments and redemption on any of its three eurobond issues, the company said on the Irish Stock Exchange.

According to the report, the required quorum (over 2/3) was reached only at a meeting as for eurobonds worth $335 million maturing in July 2022, however, only about 22% of the votes were provided, with the required minimum being 75%.

There was no quorum for the other two issues for EUR600 million maturing in 2024 and for $500 million maturing in 2026, so repeat meetings will be called.

Naftogaz specified that the owners of approximately 49% of the bonds registered for the 2024 eurobond meeting and approximately 74% of the votes were in favor of the Naftogaz proposal.

As for the 2026 eurobonds, which are due in November, about 54% registered for the meeting, and about 43% of the votes were in favor of deferment.

Repeat meetings for 2024 eurobonds and 2026 eurobonds are scheduled for August 31 at 11:00 and 11:15 London time, respectively.

Based on the quorum presented at the initial meetings, it is expected that the adjourned meetings that will be held in respect of the 2024 and 2026 bonds will have a quorum, Naftogaz notes.

Naftogaz Ukraine announces default on eurobonds

NJSC Naftogaz Ukrainy has announced a default on its eurobonds due to the government’s refusal to agree on payments on them.

“The deadline for payments to holders of Naftogaz Eurobonds expired on July 26 without payment taking place,” the company said in a press release published on Tuesday evening.

Naftogaz said that the Ukrainian Cabinet of Ministers had earlier on July 21 issued order No. 625-r obliging Naftogaz officials to seek Cabinet approval before executing any transactions related to the company’s eurobonds.

In its official letter to the government, Naftogaz indicated the availability of the necessary funds in its accounts to cover eurobond payments. Naftogaz officials also detailed the possible negative consequences for the company and for the country in the event of a hard default on eurobond payments.

The company said that in response, the Cabinet of Ministers failed to provide permission for Naftogaz to fulfill its payment obligations to eurobond holders for either the 2022 issue or the 2024 issue.

“The government has therefore defaulted on Naftogaz eurobond payments. As this failure to meet its eurobond obligations effectively deprives Naftogaz of access to international capital markets, the Cabinet of Ministers as the responsible party now assumes full responsibility for raising the funds necessary for the import of natural gas for the 2022-2023 heating season,” the company said in the press release.

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