Economy 2022-11-15T05:10:55+02:00
Ukrainian news
Odesa Port Plant Suspends Work Due To Rising Gas Prices And Plans To Start Work On Give-And-Take Contract With

Odesa Port Plant Suspends Work Due To Rising Gas Prices And Plans To Start Work On Give-And-Take Contract With New Company In November

gas, OPP, gas price, Odesa Port Plant, urea, Dachex Shipping PTE.LTD

The Odesa Port Plant (OPP, Odesa region) has suspended its work due to rising gas prices and plans to start work on a give-and-take contract in November with the new company Dachex Shipping PTE.LTD (Singapore), which won the tender in July.

The plant has said this in a statement, Ukrainian News Agency reports.

It is noted that due to a sharp change in the situation on the energy market, in particular the rise in the price of natural gas required for the production of urea, as well as the slow dynamics of growth in urea prices, the Agro Gas Trading company, which bears all business risks associated with the purchase gas and the sale of products produced by the OPP, notified the plant of a decrease in gas supplies.

"Besides, at present, there is a significant debt of the Agro Gas Trading company to OPP JSC for manufactured products, which amounts to UAH 140 million. As a result, OPP JSC has a debt to the Odesa gas distribution company, which sent recommendations to the enterprise regarding an independent shutdown of the plant in order to avoid an emergency stop on the part of Odesagas JSC,” the statement reads.

Considering the abovementioned circumstances, the management of the plant decided to stop the plant in order to prevent unnecessary spending of the plant's working capital.

It is clarified that the OPP already has experience in the framework of temporary downtime and stoppage of urea production (during 2018-2019).

According to the statement, the management of the enterprise will concentrate efforts to preserve the personnel potential of the enterprise, in particular, specialists with competence in the production of urea.

"From November 1, 2021, OPP plans to begin work on a give-and-take contract with a new company that won the tender in July 2021. The period of five weeks, which will last between the termination of gas supplies under the contract with Agro Gas Trading and the start of the supply of raw materials on a new the contract with the Dachex Shipping PTE.LTD company, the plant's management will spend on the annual preventive maintenance of the plant's equipment, which, according to the schedule, was supposed to begin in October," the statement reads.

It is also noted that the main income of the OPP for the period of temporary stoppage of urea production will be income from other types of economic activities that the enterprise conducts, in particular from the transshipment of ammonia supplied by transportation through the ammonia pipeline.

As Ukrainian News Agency earlier reported, in July, the OPP agreed with the Singaporean Dachex Shipping on the processing of customer-supplied raw materials.

In January-June, the OPP produced 409,200 tons of urea and 276,100 tons of ammonia (including 42,100 tons of commercial ammonia).

OPP is a public joint stock company, 99.5667% of the shares of which are owned by the state and managed by the State Property Fund.

The plant specializes in the production of ammonia and urea, transshipment of chemical products coming from the CIS countries for export.

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