Ukraine last week racked up more than a billion dollars' worth of investment pledges from big multi-nationals in the space of a few days, according to the country's top officials.
Ukrainian President Petro Poroshenko and Prime
Minister Arseniy Yatsenyuk said two companies would together invest at least
$1.3 billion in Ukraine, while a third investor is yet to disclose the size of
its deal.
The biggest comes from global steel giant Arcelor
Mittal, which wants to invest $1.2 billion, according to President Poroshenko.
Meanwhile, Yatsenyuk announced that U.S. commodities
and financial trader Cargill intends to plow $100 million into building a new
terminal at the Yuzhniy Port near Odesa. He also said that Houston-based
Frontera Resources has signed an agreement with state-owned Naftogaz to build a
liquefied natural gas terminal.
Frontera confirmed the latter deal with Naftogaz in a
statement released on July 15, while Cargill hesitated to provide details about
its project. Arcelor Mittal has confirmed it is ready to invest $1.2 billion
into Ukraine, Svyatoslav Tsegolko, Poroshenko’s press secretary, wrote on
Twitter.
“I am glad that you will continue investing into
Ukraine,” Tsegolko wrote, quoting the president’s address to Arcelor Mittall representatives
during the head of state’s visit to Kryvy Rih in Dnipropetrovsk Oblast on July
17, where the multi-national runs the nation’s large steel plant.
Mittal Steel bought Ukraine’s Kryvorizhstal mill for
$4.8 billion in October 2005, the highest price fetched by an ex-Soviet state
in a single privatization, according to the Financial Times. Mittal Steel then
merged Luxembourg-based Arcelor in 2006 with the newly emerged company renaming
the mill to Arcelor Mittall Kryvy Rih.
Arcelor Mittall is a global leading steel and mining
company with production capacity of 115 million tons of crude steel and operating
in 60 countries, including Ukraine.
After the
morning session of parliament on July 17, the prime minister wrote on his
Facebook page about Ukraine’s achievements in securing new investment during a
government delegation’s recent trip to North America.
“A memorandum has been signed with the big
American company Cargill regarding new investments into Ukrainian infrastructure
and the construction of a new terminal at Yuzhniy port,” Yatsenyuk wrote.
He said that the $100 million terminal would
have a freight capacity of more than 4 million tons. This will be a significant
addition to Yuzhniy port – Ukraine’s largest and most modern port, which handled
almost 47.4 million tons of cargo in 2014.
Anastasia Dudley, administrative manager at
Cargill Ukraine, told the Kyiv Post via email that the company could not
currently provide more information on the project in addition to what has been
released in its official statement.
“We are currently in discussion with a Ukrainian
company, M V Cargo, to build a deep water terminal in the port of Yuzhniy, and
we have approached the Ukraine government with a request that they dredge the
basin in front of the site to enable the handling of large vessels for the
global markets,” Cargill said in the statement.
Yuriy
Vitrenko, business development director of Ukraine’s gas and oil giant
Naftogaz, said that the memorandum signed with Forentera Resources shows the company’s interest in oil and gas exploitation.
It is planning to build a liquefied natural gas terminal on the Black Sea coast
of Ukraine that will be used to take delivery of gas from the company’s
terminal in Georgia.
“It only makes sense to start seriously working on such projects after
understanding on key points is reached between the partners,” Vitrenko said on
his Facebook page.
“After Frontera
Resources confirmed its prospects for extracting (gas) at the level of 300
billion cubic meters (which would covers all of Ukraine’s import needs for a
15-year period)… we expressed readiness to seriously prepare for this project,”
Vitrenko wrote.
This does not mean
the project will start tomorrow.
“Before we give a
definite decision, we will have to conduct a number of economic and technical
calculations,” Vitrenko said. “We’re working on this right now.”
Using the terminal
for gas transit to Europe will also be considered, Vitrenko said, adding that
no Ukrainian state budget funds would be spent on the project.
Vitrenko also
mentioned that TrailStone, a U.S.-based oil and gas trader company, had announced
its plans to enter the Ukrainian market this fall.
“TrailStone’s
entrance to Ukraine’s market is evidence for us that others trust us,” Vitrenko
added.
Top
Ukrainian officials attended the U.S.-Ukraine Business Forum on July 13 in Washington,
D.C. The event, which was intended to strengthen business
ties between the two countries, saw among other deals the signing of an Open Skies agreement between Ukraine and the U.S. and
a free trade deal with Canada.
Kyiv Post staff writer Ilya Timtchenko can be reached at
[email protected].
