Naftogaz Buys More Gas on EBRD Loan

Ukraine’s state importer Naftogaz said December 7 it has procured a total of 1.8bn m³ of gas from six European suppliers within the scope of the second round of Gas Purchase Renewable Credit Facility funds provided by the European Bank for Reconstruction and Development (EBRD).

The suppliers are Swiss firm Axpo Trading, Czech utility CEZ, France’s Engie, Italy’s Eni Trading & Shipping, and RWE Supply & Trading plus Uniper Global Commodities of Germany. All six were prequalified by EBRD in July 2016. The total value of the 30 contracts awarded was $334mn, of which $300mn was financed through the credit facility and $34mn from Naftogaz's own funds.

Weighted average price of the contracts amounted to $185/'000 m³ ($5.14/mn Btu) at delivery point.

EBRD in October 2015 opened its $300mn Renewable Credit Facility, which is intended for gas purchases at Ukraine’s western border. One of the conditions of the EBRD loan was that Ukraine’s government implement an Action Plan on corporate governance reform for Naftogaz. From December 2015 until March 2016, Naftogaz procured 1.7bn m³ gas from five suppliers under the scheme’s first round. The EBRD facility is a renewable loan for a period of three years, during which Naftogaz may partially repay the loan, then again re-borrow the funds to finance more gas purchases from the EU.

Mark Smedley