Ukraine admits $1bn gas deal mistake – Peninsula On
KYIV/MADRID: Ukraine admitted it had signed a $1.1bn gas terminal deal with an unauthorised man it thought was acting for Gas Natural Fenosa, while the Spanish company denied he was its representative and said there was no contract.
Vladislav Kaskiv, head of Ukraine’s state investment agency, signed the deal in Kyiv on Monday in front of Prime Minister Mykola Azarov and the energy minister.
Gas Natural quickly denied the deal, which would have formed two-party consortium with Kyiv to build a liquefied natural gas (LNG) terminal on Ukraine’s Black Sea coast, a project Kyiv hailed as cutting dependence on pipeline gas from Russia.
After the company said the executive named by Kyiv as its signatory had not even been there, the Ukrainian agency revised its statement to identify the man as Jordi Sarda Bonvehi.
The investment agency official in charge of the LNG project said Bonvehi had been a middleman in Ukraine’s talks with Gas Natural.
“He (Bonvehi) was organising the visit of (Gas Natural) representatives. Unfortunately, for technical reasons, company representatives did not come,” the official, Vitaly Demyanyuk said, adding that Bonvehi then signed the agreement himself.
“He expected the company would (later) confirm his powers (to sign the contract),” Demyanyuk said.
Gas Natural denied yesterday it had given any mandate for a deal in Ukraine, reiterating its Monday statement that it was not even studying anything along the lines of an LNG terminal in the country.
“Gas Natural Fenosa is sending a formal notice to the person who, according to media reports, seems to have claimed to represent the company at an event that took place in Kyiv last Monday,” the company said in an emailed statement. “This person does not represent the company, therefore Gas Natural Fenosa reserves the right to take such legal action as may be appropriate once the details of the situation have been clarified.”
Barcelona-based Gas Natural is a leading international gas and electricity company with a presence in 25 countries. It does not have any business in Ukraine.
Ukraine’s Demyanyuk declined to elaborate any further on the incident and did not say whether the agency had known Bonvehi was not empowered to sign the deal.
In addition to public embarrassment, the setback leaves Ukraine once again looking for investors in the project at a time when its budget deficit is ballooning and its economy is suffering from the eurozone troubles.
reuters