On April 27, JV "Poltava petroleum company" (PPC) held the first exchange trading of natural gas under forward contracts on the Ukrainian Energy Exchange (UEEX).
Totally were put up for trading 2 million cubic meters of natural gas at a discount 200 UAH/thousand cubic meters to published on the official UEEX website weighted average price for natural gas in the month of delivery. The minimum forecast price of the resource is set at 5500 UAH/thousand cubic meters. Delivery time is set up monthly – June-September 2017. By the results of trading the whole exposed volume of natural gas was sold with weighted average discount:
- June 100 UAH per thousand cubic meters.
- July 130 UAH/thousand cubic meters.
- August 356 UAH/thousand cubic meters.
- September 492,00 UAH/thousand cubic meters.
Forward natural gas trading at a discount to the spot price is an innovative and convenient tool to provide market participants the necessary resource for a longer period than spot trading and for sellers it allows to schedule sale of the extracted energy resource.
"We are trying to provide our customers with convenient trading tools and have developed this trading option that gives participants some opportunity to hedge the guarantee volume of supply with reference to the formula. This tool can become the basis for implementation futures contracts in the energy market of Ukraine in future, but this requires an interest on the part of market participants that we received today due to the PPC and buyers" - commented on the results of trading, CEO of Ukrainian Energy Exchange Oleksandr Kovalenko.
"We are very pleased with how went today’s trading of natural gas on new terms in the differential mode. We are the first private mining company in Ukraine which cooperates with an independent energy exchange and today experienced for the first time a unique tool that allows one to effectively plan business activities and quickly cover the risks associated with the sale of natural gas in long term. But the main thing is that we saw the confidence of market participants to us and to the UEEX that will allow other mining companies to use this tool" - appraised trading results CEO of JV PPC Viktor Gladun.
JV "Poltava petroleum company" is a public company specializes in the extraction of oil and natural gas in Ukraine and enters the structure of JKX Oil & Gas. PPC has four licenses to develop oil and gas fields in the Novo-Mykolaievsk group and Ielizavetovske field in Poltava region as well as two exploration licenses Zaplavs’ka and Chervonoyarske-Skhidne fields with a total area of 171,2 sq. km.