Ukraine Seeks Azeri Gas for LNG Terminal

Ukraine is in negotiations with Azerbaijan to firm up a long-term contract to supply gas for its planned liquefied natural gas terminal.

The country which hopes to resolve the issue by next year, is considering sealing a contract for about 10-15 years, Interfax quoted the head of the state agency for investments and national projects management Vladyslav Kaskiv.

The nation has selected five companies after a tender's second stage issued on July 8 seeking a feasibility study for a LNG terminal which envisages supply of the first consignment of liquefied gas amounting to two billion cubic meters per year by 2014, followed by five bcm per year by 2015 and then to ten bcm per year by 2017.  The study will take about three to four months, Kaskiv said.

The cost of the terminal has been pegged at between $750 million and $1 billion, with associated infrastructure ranging from $170 million - $360 million and interconnection with the gas transportation system ranging from $100 million - $460 million, depending on the site selected.

The qualifying companies are Ramboll Oil & Gas (Denmark), Foster Wheeler Iberia, Socoin, Sener (all based in Spain), and Technique Italy (Italy).  The winning bidder is to be declared on September 20th.

Five sites being considered for the terminal including  near Oddesa Port-Side Chemical Plant, another near the oil depot of OJSC Ukrtransnafta (the two sites are located near the Yuzhny Port), a site on the coast of the Berezansky firth (Mykolaiv region) and an offshore LNG terminal near Oddesa.