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  • Investors Jump on Metinvest Eurobond Offering
  • Zelenskiy’s Siesta on Corruption Fight Could Imperil No Visa with EU
  • Rada Fails to Back Green Bonds to Pay Wind, Solar Debts
  • Corona Infections Up, Controls Down
  • ZAZ to Make Arkana, a Renault SUV for Ukrainian Roads

Demonstrating the financial world’s hunger for yield, Metinvest’s Eurobond placement was almost five times oversubscribed, a banker told Interfax-Ukraine. Ukraine’s largest vertically integrated iron mining and steel company, seems to be getting more money cheaper than it expected. Initially looking for $300 million at 8.5%, Metinvest appears to be settling for $333 million worth of seven-year bonds for 7.95-8.05%. For comparison, 10-year US Treasuries carry a yield of .69%

Retreats in Ukraine’s anti-corruption fight are prompting one member of the European Parliament to threaten dire consequences. This won’t fly,” tweeted Viola von Cramon, a member of the parliament’s foreign-affairs committee. “The government is jeopardizing the visa-free regime with the European Union and the next tranche of 1.5 billion-euro ($1.8 billion) assistance.”

 

Backsliding events are:

  • A Rada vote to appoint controversial legal experts to a committee to choose a new anti-corruption prosecutor.
  • A Constitutional Court decision that Ukraine’s main anti-graft body was set up in 2014 in breach of the constitution.
  • A Constitutional Court ruling that Artem Sytnyk, director of the National Anti-Corruption Bureau, or NABU, was illegally appointed in 2015.

In response, G7 Ambassadors to Ukraine tweeted that Ukraine’s government should “demonstrate political will to protect independence and “integrity” of anti-graft institutions, including NABU. This is key to “ensure corruption does not erode reform progress made so far.” Earlier, the US and the EU tweeted a joint statement urging selection of a respected commission to choose the Anti-Corruption Prosecutor. They warned bluntly: “Our further support will depend upon it.”

Ukraine anti-corruption drive in doubt after court ruling, The Financial Times headlined. The report from Kyiv warned: “Maintaining the independence of NABU is a condition for the $5bn lifeline the IMF agreed with Kyiv in May, as well as multibillion-dollar financing from other foreign backers.”

With the government debt to solar and wind electricity producers expected to hit $1 billion at the end of this year, the Rada rejected a bill to provide sovereign guarantees to ‘green bonds’ for repaying the debt. Ukrenergo’s past debt is $778 million. This month, the government’s Guaranteed Buyer, of GarPok, is paying only one third of new bills.

After the government failed to muster enough votes, Olga Eremina, senior banker for Energy at EBRD’s office in Ukraine, said: “At present, we do not see how the government will be able to solve this problem.” The bank, a major lender to renewable projects, had planned to contribute €220 million with the European Investment Bank to support a payoff facility. “This reduces both the chance of issuing government bonds, and even less the chance that payments on renewable energy sources will be made in accordance with legal obligations,” she said at a conference organized by the European Ukrainian Energy Agency.

With coronavirus infections hitting record rates, Ukraine’s Health Minister Maksym Stepanov said that it is now up to regions to decide on closing schools and mass transit systems. Speaking on the Snidanok z 1+1 TV show, he said shutdowns mandated by Kyiv have been cancelled. In the 24-hour period before 10 a.m. Thursday, a record 3,584 infections were announced. In Kyiv, 379 infections were announced Thursday and 356 on Wednesday. Nationwide, deaths were 60 Thursday and 76 on Wednesday.

The liberalization came after police in one ‘Red Zone’ city, Ternopil imposed 98 fines for quarantine violations – on school directors, bus drivers and restaurant managers. The City Council responded by refusing to close schools, restaurants and bus service. The Council promised to pay legal fees to fight the fines. President Zelenskiy blamed the rebellion on the upcoming Oct. 25 local elections: “Ahead of local elections, they seek to please people and open up everything, allow them walking around with no masks on.”


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A return of a strict quarantine would force 42% of surveyed entrepreneurs to close or severely restrict their businesses. A snap survey of 62 owners of small and medium sized businesses was completed for the European Business Association. Of the group, only 11% had been able to obtain a loan through “Affordable Loans 5-7-9%”, a program started by the government last spring to help small businesses through the lockdown.

Kharkiv Mayor Hennadiy Kernes was flown to Germany after pneumonia from coronavirus aggravated existing conditions stemming from the 2014 attack on his life. Mayor of Ukraine’s second largest city for the last decade, Kernes was expected to be reelected in the Oct. 25 local elections. Other prominent Ukrainians hospitalized this summer for coronavirus include: Ruslan Khomchak, armed forces commander-in-chief; Yulia Tymoshenko, leader of the populist Fatherland Party; and First Lady Olena Zelenska.

Zaporizhia Automobile Building Plant, or ZAZ, will assemble Renault Arkana coupe-crossovers from vehicle kits supplied from Renault’s AvtoVAZ plant in Samara, Russia. Designed for the rugged roads of the former Soviet Union, the Arkana has a clearance of 205 mm. The suggested retail price is $16,710. With assembly expected to start this fall, production resumes at a plant that previously produced cars for Chery, Daewoo, GM, and Opel. Last month, Ukraine’s car production fell to 38, all at the Eurocar plant in Uzhgorod, reports Ukravtoprom.

Hotel occupancy in Odesa averaged 68% in August, according to a study by HotelMatrix, the Kyiv-based consultancy. The average room rate was $82. At hotels near the sea, it was $103. The survey covered hotels of three stars and above, accounting for a total of 1,700 rooms.

Despite the economic drop, road traffic in Kyiv was up 7% yoy in August, reports the Center for Transportation Strategies, drawing on data from the Center of Traffic Management. The traffic increase is due to surging car imports and a roughly one third drop in metro ridership, due to coronavirus concerns.

 

  • Ukraine to Earn $2 billion From Shipping Russian Gas to EU This Year
  • Ukraine Embarks on ‘Gas Revolution’ – Market Choice for Households

A mysterious explosion in a western Kyiv suburb knocked out the main pipeline that carries Russian gas across Ukraine to the EU. Repairs are to be completed today as officials seek to minimize the event. “Gas supplies to consumers are organized through other pipelines,” Ukraine’s Gas Transportation System Operator, assured after Tuesday’s explosion. “This situation in no way affects the transit of gas to the EU.” New York-based S&P Global Platts had a more dire view, telling its audience of energy professionals: “A major explosion near Kyiv has rocked the massive Kyiv-Western Ukraine-1 natural gas pipeline.”

The explosion broke the high pressure, 1-meter diameter pipe near the town of Chabany, just outside the Kyiv city line, about 5 km beyond the Teremky terminus of the Metro’s Blue Line. Although large volumes of gas were pumped into the air, town officials say no one was injured. Police are investigating the cause of the explosion. The main pipe across Ukraine, part of the Bratstvo or Brotherhood system, was built 30 years ago.

Ukraine will earn about $2 billion in transit fees for shipping Russian gas across Ukraine to the EU this year, Naftogaz CEO Andriy Kobolyev told journalist Yanina Sokolova on her Youtube channel. Through August, Ukraine shipped 35 billion cubic meters, 42% less than during the first eight months of last year. Under the new “ship or pay” contract signed last December, Gazprom is to pay for shipping 65 bcm this year. Last year, Ukraine earned almost $3 billion shipping 89.6 bcm. From 2021 to 2024, Gazprom is contracted to ship 40 bcm a year. This level will further cut Ukraine’s revenues, to about $1.2 billion a year.

A proposed 20-year, $20 billion deal to import half of Ukraine’s gas imports through a US LNG gas trader has fallen apart after New York news outlets reported that US prosecutors were probing former Energy Secretary Rick Perry’s role in brokering the deal to favor his Houston company, Energy Transfer Partners. Last May, Ukraine’s Cabinet of Ministers approved a deal in principle with the trader, Louisiana Natural Gas Exports. But last Thursday, in a 5,000-word article, Time.com and WNYC-ProPublica reported the Perry probe. Olga Buslavets, Ukraine’s acting energy minister, told reporters of the Louisiana deal: “Indeed, there was a refusal [of cooperation].”

The longterm Louisiana deal probably would have violated the competitive gas market that started Aug. 1 in Ukraine. “Due to the recent gas sector shake-up, Ukrainian gas consumers can now freely switch gas suppliers – they can benefit from pricing that is market-based and not set arbitrarily by the government,” Oleksandr Kharchenko, Managing Director at the Energy Industry Research Center, wrote in an Atlantic Council essay: “Ukraine quietly launches a gas market revolution.” Estimating an annual $2 billion savings to Ukraine’s budget, he writes: “All Ukrainian households have gained access to a genuine gas market, while intermediaries will no longer be able to accumulate illicit gains by simply taking gas from Naftogaz without full, or in some cases without any, payment.”

Kyiv has the cheapest household electricity prices of 33 European capitals surveyed by the European Commission’s “Quarterly Report of on European Electricity Markets.” Buried away on page 43 is a chart showing Kyiv’s price is about 4 euro cents, one fifth the 19 euro cent average for the 27 countries of the EU.

 

  • Azur to Fly from Kyiv to Chicago, Miami and NY
  • Work Starts on Dnipro’s $200 Million Airport
  • Solar, Wind Producers Fret About $1 billion Green Debt
  • Metinvest Seeks $300 million Eurobond
  • NABU Investigates Foreign Purchases of Government Bonds

Azur Air Ukraine plans to launch direct flights next spring from Kyiv Boryspil to New York, Miami and Chicago, reports Avianews. Last week, Ukraine’s State Aviation Service authorized the carrier to fly to these US cities. Citing an Azur Air spokesman, Avianews says that, starting April 1, the airline would fly to each city two times a week, probably using its Boeing 767-300 ERs. In the past, UIA and its predecessor, Aerosvit, used a spoke and hub system to fill their planes flying to North America. Owned by Anex Tours, Azur Air is expected to follow its point-to-point strategy with its US flights. The US and Ukraine have an open skies agreement.

Just in time for the October elections, work started last week on the 7-year-old project to build a $200 million new airport for Dnipro. An agreement was signed to start clearing existing airport equipment and to start a $430,000 design project. Infrastructure Minister Vladyslav Krikliy says a tender will be held shortly to build a new 3,200-meter runway, 13% longer than the existing one. This fall, Alexander Yaroslavsky says his DCH Group will start building a new terminal capable of handling 1,000 passengers an hour. Based in Kharkiv, Yaroslavsky built the highly acclaimed $107 million airport terminal for Kharkiv.

With 1 million inhabitants, Dnipro is Ukraine’s 4th largest city. But last year, its airport was Ukraine’s 7th busiest. In 2019, traffic climbed 13% to 339,000 – the level of 2015. Because of Dnipro’s poor runway and Soviet-era terminal, the airport is shunned by airlines. The exceptions are UIA and Windrose, both controlled by Dnipro industrialist Igor Kolomoisky. In contrast, in Kharkiv, a city of 1.4 million people, 11 airlines carried a total of 1,340,000 passengers last year – almost four times the level of 2015.

Antonov’s goal is produce 12 An-178 military cargo jets a year by 2013, Alexander Los, the new president of the Kyiv-based state company tells Ekonomichna Pravda. Currently, one An-178, ordered by Peru’s Interior Ministry, is moving down Antonov’s production line in Sviatoshyn, northwest Kyiv. Ukraine’s Internal Affairs Ministry has ordered another 13. In a lengthy interview, Los said the next priority is to restart production of regional jets, without Russian components. Of these, three An-148 and 10 An-158 jets are in production.

Solar and wind producers are asking Prime Minister Shmygal to use state budget money to pay bills that could top $1 billion by the end of this year. Under a law that went into effect Aug. 1, the government commits to keep current on the new, reduced green tariffs and to pay 40% of the backlog by the end of this year. The remaining 60% is to be paid next year. In a letter signed by producer groups, the government was $800 million behind on August 1st. Now, the Guaranteed Buyer, or GarPok, predicts it will have trouble paying $350 million more by the end of this year. The letter was signed by the Ukrainian Renewable Energy Association, the Ukrainian Wind Energy Association and the Ukrainian Renewable Energy Association.

Metinvest, Ukraine’s largest mining and metallurgical holding, announced yesterday that it plans to place a 7-year, $300 million Eurobond. The goal is to buy back bonds coming due in 2021 and 2023. The company has mandated Deutsche Bank, IMI – Intesa Sanpaolo, Natixis and Raiffeisen Bank International as joint dealer managers.

The Finance Ministry raised $215 million in equivalent in its weekly bond sale, six times the amount raised one week earlier. About half the amount – $112 million – was for 13 month US dollar securities, the Ministry reported on Facebook. The weighted average yield was 3.5%, the same level as at the last auction. The weighted average yield for 6 month hryvnia bonds was unchanged – 7.82%. For 2 year hryvnia bonds it rose 29 basis points, to 10.43%.

The National Anti-Corruption Bureau has asked banks to provide information on foreigners buying and selling domestic government bonds last year, several market participants told Interfax-Ukraine. One source said the Bureau wants to know if the yields were ‘overestimated.’ With some hryvnia bond rates going as high as 19.5%, foreign purchases increased 18-fold, ending the year at 116 billion hryvnia, almost $4.9 billion. This year, foreign holdings grew another 10%, until the corona crisis hit in March. Today, foreigners hold 85 billion hryvnia, or $3 billion.

 

Bond Market Views:

ICU writes of last week’s auction: Foreigners were not in a hurry to sell bills. Last week, they decreased portfolios just by UAH 421million ($15 million) to UAH 86.5 billion ($3.1 billion) with their share in total bonds outstanding sliding by 6bp to 9.97%.”

Yuriy Butsa, deputy finance minister and commissioner for Public Debt Management, said at ICU bond conference: “Low inflation in Ukraine together with relatively high real rates helps to maintain interest to our local currency market. Today we have a renewed interest to longer papers.”

Foreign investors – real and potential – were treated last week to two sobering reports on President Zelenskiy’s faltering effort to reduce judicial corruption.

“In most countries, judges take on the mafia,” writes Roman Olearchyk, The Financial Times veteran correspondent in Ukraine. “In Kyiv’s district administrative court, some of the justices are the mafia, say anti-corruption investigators.” Detailing the Zelenskiy government’s perceived backsliding on purging courts of corrupt judges, the article warns: “Tackling graft among judges is a top priority for the IMF, the EU and international investors.”

Ukraine’s reforms remain hostage to corrupt courts,” headlines an Atlantic Council article by Diane Francis, another veteran observer of Ukraine. One year into the Zelenskiy government, she writes, judicial reform “efforts are backsliding and in danger of ending entirely.” Citing intimidation of investigators and courts unwilling to take on corrupt judges, she writes: “President Zelenskiy must take on the country’s legal cabal.” By removing the 20 members of the High Council of Justice, a “culling” of judges could be done in months, not years. Otherwise, she warns: “The perpetuation of crooked courts will eventually cost Ukraine its IMF and Western support. Ukrainians will remain poor, investors will boycott, and the country will slip back under the control of oligarchs and shadowy Russian forces.”

Building an effective anti-corruption system in Ukraine “is the key to structural reforms and the transition to stronger and more equitable growth, a precondition for the current IMF support program,” IMF spokesman Gerry Rice told reporters in Washington. Pressed to say when an IMF team would come to Kyiv to review the $5 billion standby agreement approved three months ago, Rice said: “I can’t give a date for the first revision.”

 

  • $5 billion for Paving Roads Next Year
  • Hryvnia at 28/$
  • Ukraine’s Trade With China is Double Ukraine’s Trade With Russia
  • US Loan to Complete Sheraton Next to Kyiv’s Olympic Stadium
  • Wizz Air Cuts More Flights Until Spring

Ukraine plans to spend $5 billion to rebuild and repave roads next year, according to the draft State Budget approved by the Cabinet of Ministers. The Rada starts to review the budget, which would increase road spending by 16%, or $711 million, over last year’s levels. Tormented by deteriorating roads first built in the Soviet era, Ukrainians overwhelming support the roadbuilding program, recent polls indicate.

The draft State Budget calls for spending $100 million to accelerate government digitalization, easing interactions between citizen and the bureaucracy. Using Estonia as a model, Ukraine intends to move more and more processes – such as obtaining a birth certificate – online. Ukraine’s new Ministry of Digital Transformation says digitizing the “17 most common services” Ukraine will save $45 million year in corruption costs and wasted time.

Prime Minister Denis Shmygal said that the draft budget envisages 4.7% GDP growth and a deficit of 6% of GDP.  Ukraine’s economy is expected to contract by about 6% this year.

Ukraine’s hryvnia currency is pegged at 28 per U.S. dollar by the National Bank of Ukraine. After a devaluation of 1.7% in the last two weeks, the hryniva has returned to a level briefly held last March. The draft 2021 budget is calculated at 29.1 hryvnia to the dollar, Finance Minister Serhiy Marchenko told reporters.

S&P Global Ratings has predicted that Ukraine’s economy will shrink by 6% this year, then rebound by 4% next year.  In 2021, inflation will increase to 6% and the hryvnia will be at 30 to the dollar. S&P made these predictions as part of a report that confirmed Ukraine’s long-term sovereign ratings in foreign and national currency at B, with a stable outlook.

Despite the recession, the number of limited liability companies – the favorite kind of company in Ukraine – increased by 6% yoy, to 694,271 by Sept. 1, reports the State Statistics Service. Apartment dwellers gradually are taking on responsibility for their buildings as the number of associations of co-owners of apartment buildings was up by 8.5%, to 34,128. The government battle to cut the numbers of state companies made little progress: the number dropped by only 1.5%, to 3,725.

Ukraine’s total trade turnover dropped by almost 10% through August, compared to the same period last year, reports the State Customs Service. With imports down by 12%, twice as deep as the export drop of 6%, the overall trade deficit in goods and services, dropped almost in half, to $2.4 billion. Through August, imports and exports added up to $64.3 billion.

 China emerged head and shoulders as Ukraine’s largest trading partner, with $9.4 billion in two-way trade through August. Two-way trade with Russia was only half that level – $4.7 billion. Ukraine had an $800 million trade surplus with China and a $900 million trade deficit with Russia. During the course of last year, China edged out Russia as Ukraine’s largest trading partner.

Poly Changda, a subsidiary of a major Chinese conglomerate, is preparing to bid on a tender to construct part of the Kyiv Bypass Road, Serhiy Kamyshev, Ukraine’s Ambassador to China reports after meeting with company officials in Beijing. The conglomerate, Beijing-based China Poly Group Corporation Ltd, is a major Chinese builder of highways, bridges and tunnels.

Russia’s diminished economic influence in Ukraine is outlined in a new study by the Center for Economic Strategy: “Russian Economic Footprint in Ukraine.” Ukraine’s imports from Russia fell from 18% of Ukraine’s GDP in 2012, to 6% of GDP in 2019. Russia’s share of assets in Ukraine fell about 40% over the last decade, the study says. The number of Russian banks has fallen from 13 in 2009 to five today.

The U.S. International Development Finance Corporation, formerly known as OPIC, will provide $89 million in loans and political risk insurance for two American companies operating in Ukraine, one in gas and the other in hotels. Energy Resources of Ukraine Trading, a private gas trading company known as ERU, will receive $62 million in risk insurance. In 2017, the original Overseas Private Investment Corporation provided $38 million in risk insurance to ERU. Now totaling $100 million, the insurance is for 20 years.

Separately, $27 million will be loaned for the construction and operation of Ukraine’s first Sheraton hotel, the Sheraton Kyiv Olimpiyskiy. US-based Marriott Hotels & Resort has a contract with Construction Investment Company TM to manage the hotel when it is completed. Planned a decade ago for Euro-2012 football finals, the 12-story hotel on the grounds of the Olympic Stadium later underwent a re-design, increasing the number of rooms by 6%, to 208. Assuming the coronavirus pandemic comes under control and travel returns to normal, the hotel is expected to open next year.

Wizz Air has cancelled 12 more routes flights from Ukraine until March, reports Lowcost Avia. With the cancellations – from Kyiv Sikorsky, Kharkiv, Lviv, Odesa and Zaporizhia – Wizz Air increases to 20 the number of suspended Ukraine routes.

European Travel Insurance, a Kyiv company, insured 63% fewer tourists last summer compared to the summer of 2019.  Insurance for Ukrainians traveling abroad fell by 64%, to 191,000. Insurance for domestic travel fell by 58% to 35,000. The company said in an end of summer report: “Although the borders opened and air traffic resumed early June, tourists were seriously scared by the sad experience of quarantine and were not in a hurry to plunge into the world of travel again.”

In the first two weeks of September, Kyiv’s omnipresent tow trucks towed more than 2,000 cars, earning the city at least $35,000, Mayor Vitaly Klitschko told reporters. “Drivers must realize that it is better to park at 200-300 meters further away, pay for parking, and relax,” the Mayor said. “If you don’t want to pay for parking, use public transport.” Pedestrians complain that the new tow trucks seem to leave untouched cars parked on sidewalks.

  • Kyiv Tightens Corona Curbs to Orange
  • Transit Air Passengers Barred
  • Fitch Upgrades UZ
  • Ukraine’s New Love Affair with Romania: Gas, Consulate, Cross-Danube Ferry
  • New Runways for Odesa and Kherson

Kyiv operates under ‘orange’ Coronavirus restrictions. Closings include: fitness centers, hostels (but not hotels), and restaurants at night. Most scheduled surgeries are to be postponed. Shopping centers and museums can work with limited attendance. Half of the seating in public transport will remain empty. It is unclear how strong enforcement will be. Outdoor food markets were packed with shoppers, many without masks. The National Opera was selling tickets to start of the new season.

Controls tightened in Kyiv after the city reported record cases of new infections – 404 on Friday and 428 on Saturday. In one month, Kyiv has gone from ‘green’ to ‘yellow’ to ‘orange.’ Nationwide, Ukraine registered a record 3,144 new cases on Friday and 3,103 on Saturday. Ten cities, accounting for about 5% of the nation’s population, are listed as ‘red.’ This means closing cafes, restaurants, shopping centers, public transport, schools and universities. These cities are: Berezhany, Chernivtsi, Chortkiv, Dubno, Ivano-Frankivsk, Kaniv, Kolomyya, Kalush, Nizhyn, and Ternopil. 

Ukraine has expanded last week its ban on foreigners entering Ukraine this month to include travellers coming to Ukraine in transit. The expansion is believed to be aimed at blocking Hasidic pilgrims determined to celebrate the Jewish New Year, Rosh Hashanah, which was Sept. 18-20. According to the latest Ukrainian Health Ministry list of infection rates, Israel has the highest rate in the world – 395 cases per 100,000 inhabitants, as reported in the last two weeks. By this measure, Ukraine has the 8th highest rate in Europe – 88/100,000.

Fitch Ratings has upgraded Ukrzaliznytsia’s default rating to B, from B-. The agency also removed Ukraine’s state railroad from its Rating Watch Negative list, giving UZ a ‘stable’ outlook. Fitch said a key factor was Sberbank’s decision last summer to extend its $200 million loan to UZ for another three years. Last July, Standard & Poors raised UZ’s long-term credit rating to B-, from CCC. Volodomyr Zhmak, the railroad’s new CEO, said: “The updated forecast regarding Ukrzaliznytsia is an important achievement for Ukraine.”

Highlighting the growth of container rail traffic, Zhmak wants to reorganize UZ into four business units: freight transport, passenger transport, infrastructure and container. This reorganization was endorsed by the Cabinet of Ministers, reports GMKCenter.

Seven more companies are applying to take part in the pilot project to allow private freight trains on UZ tracks, Alexander Karnachev, UZ’s strategic development director, tells Magistral, the railroad’s in-house news site. Last month, Ukrainian Locomotive Company got the green light to become the first company to run private locomotives on the state rail network. For safety reasons, private freight trains initially are not to run on tracks with high speed passenger trains. Six additional companies have expressed interest, Valeriy Tkachev, the railroad’s deputy commercial director, tells UNN.

With Romania emerging as a potential corridor for Persian Gulf gas from Greece, Ukraine is paying more attention to its long neglected southern neighbor. In recent days, Ukraine’s Defense Minister Andriy Taran, and Ukraine’s Foreign Minister, Dmytro Kuleba, made separate visits to Bucharest.

Last weekend, the navies of the two nations conducted ‘Riverine 2020,’ joint exercises on the Izmail-Orlivka section of the Danube River. Minesweepers participated in the exercises, ostensibly on the lookout for unexploded ordnance from World War I and World War II. The Soviet-era gas line crosses the Danube at Orlivka, where there is a gas measuring station.

At Orlivka, the first Ukraine-Romania ferry across the Danube has carried 460 trucks in its first month of operation. Ten years in the making, the ferry finally started running Aug. 10 between Orlivka and Isaccea, Romania. The ferry cuts out a 2-hour, 100 km drive that crosses Moldova’s southwestern corner. Due to Covid travel restrictions the ferry carries only trucks.

Seeking to diversify gas supplies, Ukrainian planners hailed last July’s test shipment by ERU Trading of gas from Revithoussa, Greece’s LNG terminal, on the Aegean Sea, through Romania to Ukraine. “The ability to transport gas from the southern [Romanian] direction allows Ukraine to diversify both energy sources and supply routes,” says Serhiy Makogon, general direction of Ukraine’s Gas System Operator. Noting that Ukraine’s shipment of Russian gas to Romania has dwindled since January’s launch of Turkish Stream, he says: “The reverse of blue fuel through the trans-Balkan gas corridor gives Ukraine access to liquefied gas from LNG terminals in Greece and Turkey and pipeline gas from the Caspian countries.”

On the diplomatic front, Foreign Minister Kuleba said after his visit to Bucharest: “Energy has a huge potential of mutual benefit for Ukraine, Romania and the region as a whole.” Ukraine’s Foreign Ministry said: “The ministers devoted considerable time to discussing ambitious plans cooperation in the energy sector.” Kuleba also announced that Ukraine will open its first diplomatic office outside of Bucharest, in the border town of Sighetu Marmației. This is across the Tisa River from Solotvyno, Zakarpattia, where Romania has one of its three consulates in Ukraine.

Odesa airport’s new runway should open by the end of this year, Infrastructure Minister Vladyslav Krikliy told President Zelenskiy on a tour of the airport. The new 2,800 meter runway is expected to draw more airlines and bigger airplanes. Next year is to see the third and final phase of the project: construction of a $32 million taxi way, reports the Center for Transportation Strategies. Generally, in Ukraine, the state builds and maintains runways and private companies build and maintain terminals.

Prime Minister Shmygal promised to modernize Kherson Airport’s 50-year-old runway. Kherson International Airport is a strategic infrastructure facility in the region and has significant potential to increase the number of flights and passenger traffic,” the Prime Minister said, accompanied by Infrastructure Minister Vladyslav Kykliy. The largest airport between Odesa and Zaporizhia, Kherson handled 150,000 passengers last year and was served by four airlines – Ryanair, SkyUp, Turkish and UIA. The airport is a 2-hour drive from the line of control with Crimea. Due to international sanctions, the 2.3 million residents of Crimea can fly only to Russia.

The original English version is from our partner UBN – Ukraine Business News. For more information and news archive, go to: www.ubn.news.

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