Odesa port plant has found a gas supplier after 1.5 years of idle time

Agro Gas Trading will allocate 240 million cubic meters of natural gas to the Odesa port plant for processing on a give-and-take basis and receive ammonia and carbamide as finished products. It is announced at the press conference, regarding the signing of the agreement.

Raw materials processing is planned to begin on August 1, 2019. The volume of supplies of natural gas on a customer basis is about 60 million cubic meters per month.

The contract between AGT LLC and PJSC OPP entered into force on July 25, 2019. According to the terms of the contract, the minimum period of cooperation between the companies will be 4 months with the possibility of further prolongation, subject to approval by the supervisory board of the OPP.

The most positive market situation has developed for the last three years, Mykola Shchurikov, the First Deputy Director of PJSC OPP, said, stressing that the period of  agreement with the contractor – 4 months – was also determined by this situation on the market:

"Today, everything is due to the situation on the fertilizer market. This is probably the first time in the past three years with such a good situation. Therefore, this opportunity to allow the plant to work, and not to accumulate debts and lose people should not be lost”.   

Also, the period is based on the amount specified in the contract, which allowed to make a decision only within four months, Shchurikov added.  

According to AGT LLC, the tariffs for the processing of natural gas are $36/1 ton of commercial ammonia and $47/1 ton of commercial carbamide. The AGT added an additional $1 for ammonia and $1.5 for carbamide to the price to provide PJSC OPP the opportunity to repay part of the debt to Naftogaz.

Considering that the processing capacity of PJSC OPP for ammonia is 7900 tons/month, and carbamide – 74500 tons/month, the added price will provide monthly debt payments to NJSC Naftogaz in the amount of $119.650, which is equivalent to 3.110.900 UAH.

Commenting on the amount of money that OPP will receive as a result of the performance of the give-and-take scheme, Volodymyr Vakeryak, Deputy Director for Economics and Finance of OPP, noted that this amount will not significantly affect the amount of debt, but is an important step towards resolving the issue with Naftogaz.

“Compared to total debt, this is a symbolic contribution. Of course, this is an important step, both for us and for Naftogaz. It is in the fact that we began to solve the issue and began to move. But globally it can be solved only when a new Cabinet of Ministers is formed”.  

“We are a commercial structure, and it’s not a surprise or secret to anyone that we are pursuing completely pragmatic interests and goals, in connection with which we take the risk and obligations to launch the plant by offering to supply the customer-furnished gas and process it in ammonia and carbamide. Now the price of OPP’s products in the foreign market makes the launch project itself efficient. But thereat, we involve a qualified team of the company, whose specialists survived... during the time of uncertainty and idle time, and who have the difficult task – to minimize the technological risk and launch the plant the first time and to keep any of the mechanisms or components, or the human factor preventing the beginning of work”, said Olexander Horbunenko, General Director of AGT LLC.



Tags: gas, Naftogaz, contracts, hydrocarbon production, legislation, gas production, taxes, debt

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