Ukraine Sign $1.1 Billion LNG Deal with the Wrong Man

Ukraine has just admitted that it signed a $1.1 billion LNG deal with a man who did not even work for the company he claimed to be representing.

The deal was intended to be between Ukraine and the Spanish energy company Gas Natural Fenosa, to build a LNG terminal on Ukraine’s Black Sea coast. The terminal was part of plans to free the country from dependence on Gazprom’s expensive imports, by enabling them to accept cheaper LNG from suppliers around the Caspian Sea and the Gulf of Persia.

Vladislav Kaskiv, the head of the Ukraines state investment agency, signed the contract in front of the Prime Minister and the Minister for Energy.

Upon the announcement of the deal Gas Natural Fenosa were very quick to deny its legitimacy, saying that they weren’t even thinking about such a venture in Ukraine.

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It turns out that the man, Jordi Sarda Bonvehi, was a middle man, and not even part of the Spanish company. He was just organising the visit of the official representatives from Gas Natural Fenosa.

Once it was clear that the reps couldn’t make it, Snr. Bonvehi decided to sign the contract himself. He explained his actions to Reuters, saying: “I thought I could sign it and then settle it with the company.”

The Spaniards released a statement that said: “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.”

Kaskiv commented that the whole project would still go ahead despite the lack of involvement of Gas Natural Fenosa. “The Spanish company's possible refusal to take part in the project will not be critical.”

By. James Burgess of Oilprice.com