Ukrainian Marketer Tenders for July Gas Output

State Naftogaz Ukrainy is holding auctions to buy up to 200mn m³ from domestic producers over the month of July.

The auction will take place in two phases: first, sellers can offer their terms without revealing the price and then those who satisfy the terms can offer their final price. The qualifying proposals will be identified on June 17 and the prices offered will be revealed on June 21.

Ukraine seeks to fill gap in portfolio (Photo: Naftogaz)

The maximum price is expected to be less than gryvnia 4,504 ($181)/’000 m³ before value-added tax. In order to attract smaller producers, the lots are being divided into two sizes: four lots will be for 5mn m³ and 18 lots for 10mn m³.

Participants must have domestic production and not owe any tax. They also may not offer more than 80% of their monthly production, according to Naftogaz Ukrainy’s rules – perhaps a safeguard against unexpected short-falls in output.

These auctions will allow producers to sell their current output and receive necessary cashflow, the state-owned concern said. Proposals must be submitted by morning of June 17 and prices by the morning of June 21.

William Powell