Public Joint Stock Company #Naftogaz of #Ukraine will use 300 #EUR #million of the #loan issued by the European Bank for Reconstruction and Development (#EBRD) to find gas suppliers for the 2017-2018 winter season.
Visit our website if you are interested in the #Ukrainian_economy or #doing_business in Ukraine.Visit our website if you are interested in the #Ukrainian_economy or #doing_business in Ukraine.
Currently, a series of prequalification stages is taking place to determine the applicants. In particular, the third and final qualification round will close on April 18, 2017. However, the company has already announced that new applicants will be able to join the tender even after the aforementioned deadline to maximize the number of choices.
Gas procurement contracts will be executed within the period of May 15, 2017 to January 20, 2018. This is supposed to provide the required supply of gas that will be ample to cover the needs during the upcoming 2017-2018 winter season.
As was reported earlier, the European Bank for Reconstruction and Development allocated $300 million to credit Naftogaz of Ukraine’s transactions with the European gas suppliers and, in doing so, help the latter close the gap between the purchase and sale of gas.
Naftogaz, which is Ukraine’s largest producer of natural gas, uses a number of loan tools to import natural gas from various countries including the European ones. In addition to the EBRD loans, it also uses loan guarantees from the World Bank and Overseas Private Investment Corporation which is the US government institution.
Gas supplies by European producers accounted for 8.2 billion cubic meters in 2016. In particular, gas procurement contracts were awarded to 15 European gas producers, with the top suppliers located in Slovakia, Poland and Hungary. Gas supplies from Europe in 2016 were reported to be 11% less than in 2015.
On the whole, Ukrainian gas market is gearing towards more competition and is seeing the shrinking monopoly of Naftogaz of Ukraine. For example, privately held companies importing gas to Ukraine account for 26% in 2016 as opposed to just 1% in 2014. The positive changes and significant shift towards the free market were greatly facilitated by the new natural gas market legislation which came into effect on October 1, 2015.
The ultimate long-term goal for the Ukrainian gas market is to diversify energy sources and establish competitive pricing based on the supply and demand equilibrium as opposed to the monopolistic pricing established by Naftogaz of Ukraine.