JKX Commences Ukraine LPG Operations

JKX Oil & Gas has announced that it has commenced production and sales of liquefied petroleum gas  at its Novo-Nikolaevskoye group of fields in Poltava, Ukraine.

Following commissioning and testing of the Canadian designed processing plant, LPG production commenced on 4th July and the first commercial cargoes have now been dispatched. Production is planned to reach approx. 80 tonnes per day with daily off-take contracted to pre-qualified wholesale distribution companies.

The LPG market in Ukraine has grown by over 50% in the last five years and is currently in excess of 800,000 tonnes per year. Wholesale prices correlate closely with the Brent market and are currently in excess of $800/tonne.

Dr Paul Davies, JKX's Chief Executive, commented: 'We are delighted to add LPG production to our existing oil and gas producing portfolio in Ukraine. The facilities came in on schedule and on budget and we anticipate to achieve pay-back on the incremental investment in approx. six months. The added value of this product stream will enhance the economic performance of our Ukraine operation and effectively increase gas realisations (which are currently in excess of $10/Mcf) by approx. 10%.

Source: JKX Oil & Gas