Ukrgaz-Energo To Supply Gas At An Unregulated Tariff.

Earlier today the National Electricity Regulation Commission (NERC) granted Ukrgaz-Energo, a JV created by RosUkrEnergo and Naftogaz Ukrayiny, a 5-year license to supply 5 bln cm of natural gas per year to domestic consumers at an unregulated tariff. Ukrgaz-Energo initially applied to supply 32 bln cm a year. Concorde Capital: The license enables Ukrgaz-Energo to sell 5 bln cm of gas to Ukrainian market with a discretionary supply charge. Although the gas price limit set earlier by the NERC for industrial enterprises at $107/ths cm remains effective, it does not include charges for supply and transportation. Thus, Ukrgaz-Energo will be able to sell that amount of gas at a price higher than $107. The restriction of 5 bln cm is questionable, as Ukrgaz-Energo may be able to resell extra volumes of gas to other licensees. Watch for Vladimir Nesterenko’s Analyst Notebook later today.