Ukrnafta started to sell natural gas at auctions Press releases
Ukrnafta started to sell natural gas at auctions
Ukrnafta started to sell natural gas at auctions

Since April 1, 2018, PJSC Ukrnafta started to sell the natural gas of its own production at the open auctions and by bilateral agreements. Thus, in April the company conducted two auctions at the Ukrainian Energy Exchange and sold 4 mln m3 of gas at each at the weighted average price of UAH 8,860 per 1,000 m3 and of UAH 8,562 per 1,000 m3. In total, last month the company sold 31 mln m3 of its own production.

Earlier, at the end of 2017, the bilateral agreement (prolongation of the agreement of 2011) of Ukrnafta with PJSC Dniproazot was over. By this document the company processed all gas of its own production into ammonia at the leased capacities of the plant and sold the final product directly to the enterprise itself. By the bilateral agreement with Dniproazot in 2017 the company sold 0.5 mln tonnes of ammonia at the wholesale prices that took into consideration the specific terms of supplies. In the context of export parity prices the prices for Ukrnafta’s ammonia were made with reference to long-term formula-based quotations, oriented to the ammonia prices at the foreign grounds.

Meanwhile, the information that was published by some mass media about so-called lost profit and even red ink position regarding the ammonia sales is false. It is based on the unprofessional analysis that, in its turn, is grounded on the comparison of non-comparable price quotes. The analysis compares the prices of huge amount of ammonia, produced by Ukrnafta at the leased capacities, for one buyer with the announced (not de facto) prices of supplies by railway tanks and in other similar lots.

Earlier the State Audit Service of Ukraine by the initiative of the National Anticorruption Bureau of Ukraine made the professional analysis of this issue. Thus, Ukrnafta’s ammonia prices, defined in the bilateral contract with Dniproazot, got their independent feasibility.

Currently Ukrnafta doesn’t produce ammonia on any terms and is in the process of transferring production capacities to Dniproazot.


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