OREANDA-NEWS. February 01, 2011. Ukrnafta, the largest oil & gas producing company in Ukraine, has been permitted by the Kyiv commercial court to supply 2.1 Bcm of natural gas to industrial consumers, according to the announcement posted on the court’s site on Jan 20. The Court also obligates Ukrtranshaz, the operator of the Ukrainian gas pipe line network, to carry out Ukrnafta’s previous demand to up the gas from the subsurface storage.

Millennium Capital considers the news as POSITIVE for UNAF. By now Ukrnafta has secured judgment to supply nearly 3.4 Bcm to industrial consumers at an unregulated tariff, while previously it was obliged to sell natural gas to Naftogaz under regulated low tariffs. Most of this gas is likely to be supplied to Ukrainian nitrogen fertilizer producers, in particular DniproAzot and Cherkasky Azot. We expect Ukrnafta to produce healthy financial results in 1Q2011 on the level of the 3Q2010 perfromance (UAH 975mn in net profits) thanks to the gas branch of its business.