Ukrainian Importer Eyes Fourth Gas Tender

Importer Naftogaz Ukrainy and the European Bank for Reconstruction and Development (EBRD) are hoping to issue a fourth tender for gas supplies to Ukraine this quarter, according to a statement from the state company. Last December it awarded three, for gas deliveries in December and January. Two went to UK-listed Noble Clean Fuels and the third to French ENGIE (formerly GDF Suez). Both winners were already supplying gas to Naftogaz, which has been reducing its reliance on Russian gas in favour of cheaper, politically neutral, deliveries from the west.

A fourth tender was not awarded as it was priced too high relative to Ukraine's weighted average cost of gas. Naftogaz has not disclosed the price or the volume of any of the tenders awarded but it did say the three awarded came in at below the comparable price of imports from Russian export monopoly Gazprom. ENGIE takes delivery of some of its Russian gas on the Austria-Slovakia border, giving it a short distance to ship the gas into Ukraine.

Last July the European Bank for Reconstruction and Development agreed to lend the state company $300 million, backed by a sovereign guarantee. The loan was to bridge the gap between the purchase and the subsequent sale of the gas over the course of the winter and so allow Kiev to save money on subsidies. The EBRD is keen to help Ukraine's gas sector liberalise along European Union lines, including eventually the unbundling and possible sale of its huge but old pipeline network.