Company news in April 2004 | |||
ESGC to Issue Shares Worth of RUR 30 Million to Shape the Capital Stock
The Board of Directors of East Siberian Gas Company (ESGC) made a decision to issue shares worth of RUR 30 million to shape the company''s capital stock, ESGC''s news release goes. The par value of shares will amount to RUR 100, the company''s General Manager Alexey Sobol said. They are to be redeemed on a parity basis by the Irkutsk Region and TNK-BP. In his words, funds from the shares placement will be channeled towards funding construction of a pipeline in the Irkutsk Region from the Kovykta gas and condensate deposit. Total costs under this project are planned at US$ 7-8 million in 2004. Mr. Sobol pointed out that the bulk of operations will be funded by shareholders'' loans (mostly TNK-BP) in 2004. He also informed that a majority of funds will be funneled to project work, in particular, ESGC would draft the investment substantiation for the gas pipeline construction project by this June and would get down to prospecting in summer. In his words, the feasibility study will be ready in 1Q 2005. Mr. Sobol also noted that ESGC plans to hold a tender for selecting the turnkey contractor for the gas pipeline construction by the end of 2004. According to the company''s news release, the primary objectives to be fulfilled in 2004 include to finalize the investment substantiation under the project, to sign preliminary gas supply agreements with potential consumers and to start to draft working documents. East Siberian Gas Company has been established this year on a parity basis by the Irkutsk Region and TNK-BP as an operator of gas supplies from the Kovykta field to the Irkutsk Region market. The project''s capital expenditures are estimated to reach US$ 676 million in 2004/2034, including US$ 480.4 million during 2004/2006. The project envisages construction of a 550-km trunk gas pipeline Kovykta/Sayansk/Angarsk/Irkutsk as well as of a gas-processing facility, and a condensate-processing plant. The first gas supplies from the Kovykta deposit to the Irkutsk Region may start as early as in 2006 in the amount of 300 million cm. Gas supplies to the regional market would come to 2 billion cm in 2007 and would hit 2.2 billion cm in 2009. The project''s payback period is 8-9 years, with gas prices standing at US$ 45-50 per 1,000 cm and with IRR being equal to 18%-19%. Kovykta''s gas consumption will be focused in industrial towns of the region – Angarsk, Sayansk, Irkutsk, and Usolie Sibirskoye. Potential consumers of the Kovykta gas include, in particular, KhimpromUsolje, NPK Irkut, Sayanskkhimplast, East Siberian Railway, Irkutskteploenergo, Angarsk Petrochemical Company, and the Angarsk Polymer Works. The project will also create prerequisites for gas export to the Pacific Region.
Source: INTERFAX