13:01 16.01.2013

Ukrainian energy ministry to choose company to build LNG terminal by Feb

3 min read

Ukraine's Energy and Coal Industry Ministry plans to decide before next month what company will be building a terminal for the re-gasification of liquefied natural gas (LNG), Energy and Coal Industry Minister Eduard Stavytsky said.

"We now have three proposals relative to the building of the LNG terminal. We are studying them. I think that before the end of January we will determine finally the timeframes and who will be doing the work," Stavytsky told the press in Kyiv on Wednesday.

Talks are underway with Kogas and China National Petroleum Corporation (CNPC), he said.

By the time this month ends, it will also have been determined whether a new LNG terminal agreement will be signed or if changes will be made to the old one, Stavytsky said. Commenting on the scandal involving the signing of that agreement, he said that the outcome of the situation has to be an improved system for the signing of investment agreements.

As reported, on November 26, 2012, the State Agency for Investment and National Projects of Ukraine signed a cooperation agreement with Gas Natural Fenosa as part of the construction of the LNG terminal in Odesa region. The document was signed by Jordi Sarda Bonvehi, who earlier introduced himself as a representative of the Spanish company Enegas, which was allegedly interested in investing into the Ukrainian LNG terminal.

However, Gas Natural Fenosa and Enegas denied they had signed any deals with the Ukrainian government. Each denied that Jordi Sarda Bonvehi represented it. The two companies said they were not considering joining the consortium that would run the project.

The LNG terminal project manager, Vitaliy Demianiuk, explained that Sarda Bonvehi is a professional commercial agent who acts on behalf of many Spanish companies.

Media outlets have reported that the 43-year-old Bonvehi had been a ski instructor.

The opposition association Batkivschyna is demanding Ukrainian President Viktor Yanukovych, Prime Minister Mykola Azarov, and head of the State Agency for Investment and National Projects of Ukraine Vladyslav Kaskiv be held accountable for the cooperation deal for the building of the LNG terminal with "an unknown Spanish investor."

The Ukrainian cabinet of ministers approved on January 14 a report by a governmental commission reviewing the circumstances surrounding the signing of the cooperation agreement with Gas Natural Fenosa.

According to this document, the question of a reprimand for Kaskiv will be raised with the president. The state investment agency chief is also advised to make staffing changes for the LNG terminal project, strengthening it.

The building of the LNG terminal in Ukraine is split into two phases. In the first (to be launched in 2016), there will be a floating terminal with handling capacity of 5 billion cubic meters (bcm) of gas per year. In the second (2018), there will be build an onshore terminal with capacity of 10 bcm per year.

The first phase will see dredging (with funding of EUR 121 million raised by GP LNG-Terminal), the building of a connection with a high-pressure gas pipeline (with less than EUR 113 million in DK Ukrtransgaz funds), and the installation of a leased floating terminal.

The second phase will involve the building of an onshore terminal costing EUR 735 million.

AD
AD
AD
AD
AD