Azernews.Az

KYIV – Ukraine sees Azerbaijan as a priority supplier of liquefied natural gas (LNG), head of the working group "National Projects" of the Economic Reforms Committee under the Ukranian President Vladislav Kaskiv was quoted as saying by RIA Novosti.

"Azerbaijan is one of the coveted and priority suppliers of LNG for several reasons," Kaskiv said.

He said the main advantage of Azerbaijan as a supplier is a short delivery route, which will rely on mutually beneficial terms of cooperation.

Head of state enterprise "LNG-terminal" Petr Miroshnikov said all gas will be supplied to the terminal under the long-term contracts. "Part of the gas, 20-30% will fell to spot deal," he said.

The preparation of a feasibility study for the construction of a terminal to receive liquefied natural gas (LNG) in the Ukraine will be completed in the third quarter of next year, according to a report on the presentation of the terminal, posted on the website of the State Agency of Ukraine for National Projects.

Ukraine established a state-owned enterprise for the construction of the terminal. Its task involves preparing a feasibility study and searching for investors for the project.

Plans to establish an international consortium in the third or fourth quarter of 2011 for the project are on the cards, according to information contained in its presentation. Work on the design of the terminal construction will happen in 2012. Available information indicates the signing of contracts for the supply of LNG is scheduled for last three quarters of 2012 and the first quarter of 2013. The plan is to begin the first phase of construction of the terminal from the second quarter of 2013, and to complete it by late 2015.

The presentation notes show two options for funding the project. The first option is for the Ukraine to act as a majority shareholder, with the ability to purchase 51 and more percent. Should they opt to become a minority shareholder, the Ukraine's share may then range from 5 to 10 percent.

There are also indications in the presentation document that Azerbaijan, Egypt, Libya, Algeria and Qatar are considered as the LNG supply routes to the terminal. In terms of distance, the option of having Azerbaijan as a supply route is the shortest (2,300 km).

The supply of Azerbaijani gas to the Ukraine is possible within the Azerbaijan-Georgia-Romanian Interconnector (AGRI) project. It envisages the supply of Azerbaijani liquefied gas through Georgia and the Black Sea to Romania. The Ukrainians show great interest in this project.

The AGRI