You're reading: Ukraine selects five companies that could develop feasibility study of LNG terminal

Five companies have won through to the second stage of a tender to develop a feasibility study for a liquefied natural gas terminal (LNG-terminal), the head of the state agency for investments and national projects management, Vladyslav Kaskiv, has said at a press conference in Kyiv.

According to him, in particular, the following companies will participate in the second stage of the tender, which will end soon: Ramboll Oil&Gas (Denmark), Foster Wheeler Iberia, Socoin, Sener (all based in Spain), and Technique Italy (Italy).

At the same time, the following companies dropped out of the tender: Zagope (Portugal), Ambetech (the United States), Sweco (Finland) and the Ukrainian subsidiary of PricewaterhouseCoopers. Kaskiv said that these companies would not be allowed to take part in the second stage of the tender due to the improper preparation of their tender documents.

According to Kaskiv, the winner of the tender will be announced by September 20, 2011, and the development of a feasibility study will take about three or four months.

He said that Ukraine continues seeking a partner to supply gas for the LNG terminal and hopes to resolve the issue by next year. In particular, he noted that Ukraine is currently in talks with Azerbaijan.

"Ukraine is prepared to guarantee a long-term gas purchase contract," he said, adding that the term of the contract would be about 10-15 years.

As reported, Ukraine on July 8, 2011, called a tender to prepare a feasibility study for the construction of an LNG terminal.

The preliminary project foresees the supply of the first consignments of liquefied gas amounting to two billion cubic meters per year by 2014, bringing the volume to five billion cubic meters per year by 2015 and to ten billion cubic meters per year by 2017.

Five sites for the construction of the terminal are being considered, in particular, a site near Odesa Port-Side Chemical Plant, a site near the oil depot of OJSC Ukrtransnafta (the two sites are located near the Yuzhny Port), a site near Ochakiv (Mykolaiv region), a site on the coast of the Berezansky firth (Mykolaiv region) and an offshore LNG terminal near Odesa.

The final cost of the terminal will be determined once the feasibility study is completed. However, according to preliminary estimates, construction of the terminal itself will cost from $750 million to $1 billion, associated infrastructure – $170 million to $360 million and the link with the gas transportation system – $100 million to $460 million, depending on which site is selected.