You're reading: American TransGas intending to begin producing motor fuels in Ukraine

 American TransGas Development Systems is planning to build three plants in Ukraine for $10 billion to produce motor fuels from coal, TransGas Founder and President Adam Victor said in an interview with newspaper Business. "The project [includes] the construction of three plants and a possible increase in the future to five. It's necessary to construct the factories no more than 50 kilometers from the location [where] coal is produced. We are preliminarily considering sites in the Luhansk, Lviv [and] Kirovohrad Regions. […] Depending on the technologies used, investments in one plant will total $3-3.5 billion," he is quoted as saying.

 For one plant to operate without interruptions, 2.5-3 million tonnes of bituminous coal or 4-4.5 million tonnes of brown coal will be needed per year, Victor said. This could even be increased if new electricity generation facilities are built.

“In total, we are planning to produce 3.34 million liters of liquid fuel (high-octane gasoline and diesel fuel) per day, and ship [it] exclusively to the Ukrainian market. The fuel will adhere to not only Ukrainian standards, but also European and American ones. The selling price of gasoline produced with this technology will be $3 per gallon, or $0.79 per liter, excluding tax and excise duty,” he said.

Aside from motor fuel, the plants will be able to produce fertilizers (nitroammophos) or carbon chemical compounds. The sale of ash, sulfur, nitrogen and heavy metals are expected to be sold as byproducts.

TransGas Development Systems is planning to sign long-term contracts of no less than 20 years with state and private coal producers to provide its factories with raw material. The company is not, however, planning to purchase mines. TransGas has already signed a memorandum of cooperation with Uglesintez Ukrainy, a subsidiary of Ukraine’s national oil and gas company Naftogaz Ukrainy.

TransGas will need around 3.5 years to design and build the factories, and the return on investment period is up to 8 years.