Ukraine Offers New Terms for Residential Suppliers

State Naftogaz Ukrainy is offering to sell residential gas suppliers annual contracts with monthly pricing, it said July 30. The public service obligation (PSO) ends August 1. Naftogaz will set the price before the end of the delivery month.

It said the approach follows the European Union model for long-term contracts and large volumes but that it would offer alternative models for its other clients depending on their procurement needs. The price for annual contracts will be derived from spreads on international trading hubs and will be predictable, fully reflecting the market conditions.

CEO Andriy Kobolov said that Naftogaz had carried out its obligations in good faith during the time it was bound by the PSO. And from August 1, when it no longer applies, the company intends to remain a reliable supplier at home. “We offer Ukrainian and imported gas in sufficient quantities to satisfy the needs of Ukrainians.” 

As the director of Naftogaz Commercial Willem Coppoolse said, “Naftogaz will also very soon offer a new range of products for everyone involved in the Ukrainian gas market.” Companies will be able to buy gas for various periods and on various conditions. Quarterly contracts will be transparent and sold on the Ukrainian energy exchange.

Naftogaz continues to work on the debt problem which has grown during the PSO period, and is now almost hryvnia 24bn ($870mn).