Preliminary timeframe for supplying Rosneft resources by SOCAR to Ukraine disclosed

SOCAR New Energy, the future operator of supplies of Rosneft resources to Ukraine, has begun substantive negotiations on cooperation with Ukrainian importers of LPG, market participants told enkorr, Report informs.

During May 18-19, in the Kyiv office of the Socar Ukraine trade house, meetings were held with leading operators, in particular with Nadezhda, WOG, OKKO, BRSM, Avantage-7, KLO.

It is planned that the company will be able to offer the first volume of TERM contracts from July 2021. There is information circulating among traders that the premium under the contract may be $25 per ton to the monthly average value of the Argus daf Brest quotation.

The premium for TERM contracts with Proton Energy in 2021 was $16.8 per ton.

So far, SOCAR New Energy offers spot consignments of Rosneft autogas in May and June with a premium of $40 per ton to the monthly average daf Brest. Ukrainian traders consider this price to be adequate, since the spread between the quotes of daf Brest and daf Ukraine, which is the basis for the long-term contracts of TCO and Lukoil, for 20 days in May amounted to $74.

“Taking into account the duty, it will be approximately plus $50, and this is more profitable than any resource from Russia, Belarus or Kazakhstan,” said one of the participants in closed meetings with SOCAR New Energy.

Interviewed interlocutors note that SOCAR New Energy focuses on its readiness to start shipping LPG at the end of May, although the operators consider this probability extremely low. So, on May 20, there are no applications from the factories of Rosneft to Ukraine among the plans of the Russian Railways.

“It doesn’t happen that fast. In the best case, the first volumes will go in the first ten days of June,” says one of the interviewed traders.

Ibrahim Ahmadov, deputy head of Public Relations and Event Management Department at SOCAR, told Report earlier that an agreement was signed with the Russian oil company Rosneft making it possible to supply oil products by Rosneft to Ukraine, Poland, the Baltic countries and other Eastern European countries.

The Swiss office of SOCAR Trading will oversee sales and communication with contractors. Meanwhile, the role of the Ukrainian office of the company in the distribution and sale of volumes in Ukraine is not excluded, either.