Ukraine Advances in LNG Terminal Development

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Ukraine Advances in LNG Terminal Development

PR Newswire KYIV, Ukraine, August 9, 2012

KYIV, Ukraine,August 9, 2012/PRNewswire/ -- Today the Ukrainian government approved the feasibility study of the construction of the LNG terminal, informed Ukrainian Energy and Coal Industry Minister Yuriy Boyko. Technical development of the station will be finalized by December 2012, according to the National ProjectLNG Terminal. The construction of the first line of the terminal will begin in 2013. By 2015 the terminal will be able to process 5 billion cubic meters of gas per year. The LNG terminal will be built at the shore of the Black Sea in the Odesa oblast, southernUkraine. The final capacity of the terminal is projected to reach 10 billion cubic meters of liquefied gas per year. Comparably, the volume of gas Ukraineimported in January toJuly 2012amounted to 19 billion cubic meters. The output capacity of the existing Ukrainian gas transporting system, currently responsible for the transportation of 70 percent of Russian gas toEurope, is 178.5 billion cubic meters per year, informs Naftogaz ofUkraine. The use of the new LNG terminal will decrease the price of imported gas by 15- 20 percent, estimates the State Agency for Investment and National Projects of Ukraine. Currently,UkrainepaysUSD 426per thousand cubic meters of Russian gas. The billion-dollar project will pay off in five to seven years. Both the state and private sector will have shares in the business. InMay 2012, the Ukrainian government was reported to negotiate an agreement withAzerbaijanregarding the supply of 10 to 15 billion cubic meters of Azeri gas per year through the LNG terminal. Moreover, the construction of the trans-Caspianpipeline - a projectUkrainewas ready to invest up toEUR 790 millioninto - is set to allowUkraineto transport tankers with liquefied natural gas from the Georgian Black Sea port Kulevi to the Ukrainian LNG terminal. In 2011, SOCOIN Ingeniería y Construcción Industrial,Spain, won the right to produce the feasibility study of the LNG Terminal National Project. The construction of the terminal will allowUkraineto import gas from the countries ofNorth Africaand theMiddle East, states Naftogaz ofUkraine. Ukrainian officials are also negotiating with Algerian, American, and Qatari companies in order to obtain preliminary agreements on possible gas supply once the LNG terminal inUkrainebecomes operational.