Bloomberg News

Ukraine Receives Four Bids to Value Naftogaz Pipes, Storage

February 27, 2012

Ukraine received four bids to value state-owned NAK Naftogaz Ukrainy’s pipelines and gas storage, said Deputy Chief Executive Officer Vadym Chuprun.

Ukrainian subsidiaries of Ernst & Young LLP, Baker Tilly and Duff & Phelps Corp. (DUF) as well as Kiev-based Thomas & Simonova bid to value Naftogaz, Chupron said today.

Naftogaz seeks to have an independent market estimation of the worth of its pipelines, underground gas storage facilities and other infrastructure after the government decided last year to assess the value of the country’s transportation system.

Russia’s OAO Gazprom supplies about 20 percent of the European Union’s gas needs through Ukraine’s pipes. Ukraine seeks to renegotiate the terms of a 10-year gas supply and transit accord with Russia from 2009, saying the present deal is too strenuous for the state budget and for individuals.

“Ukraine’s gas transportation system is a strategic facility, is an asset which has to help economic growth and it is a serious political argument,” Energy and Coal Industry Minister Yuriy Boyko said today.

Ukraine needs Russia for guarantees on transit volumes and investments in pipelines, Boyko said on Jan. 18. Ukraine favors forming a group with the EU and Russia to manage its pipeline system, he said.

The cost of modernizing Ukraine’s gas pipelines will be $5.3 billion over seven years, Chuprun said Sept. 23, according to Kommersant-Ukraine.

To contact the reporters on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net; Kateryna Choursina in Moscow at kchoursina@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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