Ukraine TSO Tenders for Balancing Gas, Hub Indexed

Ukrainian state transmission company Ukrtransgaz has announced a tender to buy 2.18bn m³ of gas this year for its own needs and for balancing, divided into ten lots each of 218mn m³ in order to attract as many offers as possible, it said March 10. Delivery is between April 1 to December 31. The price for each month will be indexed using prices at a German hub, NetConnect Germany (NCG), “ensuring a market price for Ukrtransgaz,” it said.

Last year, private gas producers produced 4.2bn m³, but that was not enough for Uktransgaz’ needs. Private importers received 2.9bn m³, of which the largest took 1.2bn m³. So dividing the purchases into lots will allow more potential sellers to offer gas, it said.

"We support the decision of Ukrtransgaz to divide this purchase into lots and use market mechanisms to set the price. This is one more step towards an effective and competitive gas market in Ukraine,” said the CEO of parent company Naftogaz Ukrainy, Andriy Kobolev.

A previous tender for gas purchases was cancelled by the anti-monopoly agency, Ukrtransgaz said. In the past, Ukrtransgaz bought this gas from its parent company, and last year this amounted to 1.7bn m³.

Purchasing by Ukrtransgaz for system balancing is now managed separately from Naftogaz's import programme. 

William Powell