Ukraine red faced over fake $1bn LNG deal

By bne IntelliNews November 29, 2012

bne -

A red-faced government in Ukraine has had to admit that it was fooled into signing a $1.1bn deal to build an LNG terminal with a man posing as the representative of a Spanish energy company.

Vladislav Kaskiv, head of Ukraine's state investment agency, signed the deal in Kyiv on November 26 - in front of Prime Minister Mykola Azarov and Energy Minister Yuri Boiko - with a man identified as Jordi Sarda Bonvehi, who said he was acting for Spanish energy firm Gas Natural Fenosa.

The deal was trumpeted as another element in Kyiv's bid to break Russia's monopoly on gas supplies. However, the Spanish firm immediately denied any deal or intention to invest in Ukraine. It added that it has never heard of Bonvehi.

Ukriane said Bonvehi was a middle man. "He was organizing the visit of [Gas Natural] representatives. Unfortunately, for technical reasons, company representatives did not come," investment agency official Vitaly Demyanyuk said, according to Reuters.

He added that Bonvehi then signed the agreement himself. "He expected the company would [later] confirm his powers [to sign the contract]," Demyanyuk said. However, Gas Natural has flatly denied it has any interest in working in Ukraine.

"Gas Natural Fenosa is sending a formal notice to the person who, according to media reports, seems to have claimed to represent the company at an event that took place in Kiev last Monday," the company said in an emailed statement on November 28. "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."

The investment agency has not offered any more explanation, nor has it said anything about checks on the authority of Bonvehi. It looks like the government was victim of a scam. "This was most likely a result of gross negligence on part of officials," an unnamed source close to the government said.

"I thought I could sign it and then settle it with the company," Bonvehi told Reuters by phone, declining to elaborate further or say which company he represented. The newswire said it could not independently establish the identity of the man, who said he was in Barcelona.

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