OJSC Ukrtransgaz plans to conclude an agreement with NJSC Naftogaz of Ukraine to supply 1.6 billion cubic meters (bcm) of gas to the tune of UAH 13.4 billion, including VAT.

The deadline for the supply is April 30, 2017, Ukrtransgaz said in an announcement in the ProZorro electronic procurement system.

The natural gas will be used for technological use and the company's own needs.

Ukrtransgaz says it has applied for the procurement of gas with the use of the negotiation procedure because of the lack of time to conduct a tender through open bidding, as the supply gas contract with Naftogaz is expiring in January.

The lack of gas for technological use may cause the suspension of gas supplies both to domestic consumers and a halt to transit shipments to Europe.

"The need for this procurement is linked with the special economic and social circumstances that make it impossible for the customers to meet the deadlines of the bids, which serves the basis for the negotiation procedure in the procurements," Ukrtransgaz explained.

In November 2016, Ukrtransgaz announced an open tender to buy 2.5 billion cubic meters of gas, admitting two out of the five bidders that had submitted applications.

On the basis of a complaint regarding the tender, the Antimonopoly Committee of Ukraine obliged Ukrtransgaz to cancel the tender, at the same time, it confirmed that a complainant's bid had been rejected in keeping with laws, as it did not meet the requirements of the tender documentation. At the same time, another bidder's offer was accepted in violation of the requirements of the tender documentation. In the end, only Naftogaz's bid was qualified for the tender, which served as the basis for the cancellation of the bidding.

Thus, Ukrtransgaz in January-April will buy gas from Naftogaz at a price of UAH 8,375 per 1,000 cubic meters. In January 2017, the price of gas for industrial consumers on terms of prepayment was set at UAH 7,552 per 1,000 cubic meters, in February at UAH 9,215 per 1,000 cubic meters (the price includes VAT). The price is applicable if a consumer has no debts to the gas supplier.

Ukrtransgaz, a wholly owned by Naftogaz, operates the country's gas pipelines and 12 underground gas storage facilities with a total capacity of 31 bcm.