Cub Energy Inc, a Ukraine-focused energy company, announced that its 100% owned subsidiary, Tysagaz LLC (Tysagaz), has signed a contract for the purchase of two Jenbacher gas power generation engines that should convert the natural gas produced from the RK field into power that can be sold in western Ukraine at local market rates. Each power generation unit will have the capacity to produce as much as 1.5 megawatts (MW) of power each or 3 MW in total.
The Jenbacher units will be manufactured in Europe and expected delivery is in the Q4 2020 with power revenue expected in Q1 2021. The successful sale of power into the local grid will be subject to the successful installation of the Jenbacher units, regulatory commissioning, and tie-in to the local power supply. The direct capital costs of the two units are approximately USD 1.4M and the total investment is expected to be approximately USD 1.9M. The total investment amount includes approximately USD 0.3M in Value Added Tax (VAT) which should be refunded on commercial production. There are approximately 60 of these power generators units currently in operation in Ukraine.