Ukrtransgaz buys 2.18bcm of gas to rebalance network

Ukrainian grid operator Ukrtransgaz carried out its first ever gas purchase to rebalance the supply of gas flowing through the transportation system on Wednesday, via the electronic platform Prozorro.

The price for each delivery month was indexed to ICIS’s European Spot Gas Markets German NCG price assessments.

The total volume of gas purchased was divided in 10 volume groups of 218 million cubic meters (mcm) each. Seven suppliers took part in the tender, according to information released by Naftogaz.

Ukrtransgaz paid between Ukrainian hryvnia (UAH) 5,920 – 6,396/thousand cubic metres (€19.33-20.91/MWh), excluding VAT and transportation and delivery costs, which combined are expected to amount to UAH7,670.

The winners of the auction included:

Naftogaz Ukrainy with 654mcm worth UAH4.12bn

Eru Trading with 218mcm valued at UAH1.35bn

Trafigura Ukraine with 218mcm worth UAH1.35bn

“Gas Trading Company” with 218mcm valued at UAH1.33bn and

“Energy Service Company” Esko-Pivnich with 218mcm for UAH1.29bn.

“I am confident that this event will also have a positive effect on prices for local private extracting companies,” said Ukrtransgaz’ executive director Sergiy Makogon on social media website, Facebook. “The spread on the price should decrease and the price inside Ukraine should be tightened to import parity due to the fact that the winning suppliers will have the opportunity to buy gas inside Ukraine if the price is cheaper.”

The gas is set to be delivered during April-December 2017.

Deliveries of gas will begin after the signing of the relevant contracts with the winners. The next tender will take place in early autumn, Ukrtransgaz said. lorena.ruibal@icis.com