IPE Sarmatia to increase authorized capital
Baku, Azerbaijan, Mar.18
By Maksim Tsurkov - Trend:
The International Pipeline Enterprise (IPE) Sarmatia, which was created to attract investments for the design and completion of construction of the Odessa-Brody oil pipeline until the Polish city of Plock, made an official decision on increasing the authorized capital, the IPE Sarmatia Director General Sergei Skripka told Trend March 18.
The Ukrainian company Ukrtransnafta and the Polish company PERN Przyjazn established IPE Sarmatia on July 12, 2004.
He said that it was decided to increase the authorized capital of the enterprise at the last extraordinary general meeting of the participants of the Sarmatia.
"The process of capital increase will take place in several stages," said Skripka. "In accordance with the Polish law, the first step after the decision is sending out notices to participants with requests to buy back shares in the authorized capital of the IPE Sarmatia. After an official confirmation of readiness to redeem these shares is received, the participants listed will transfer the necessary funds."
The IPE Sarmatia's authorized capital stands at 20.06 million zlotys (about five million euros). In accordance with the decision of the shareholders, capital of the company will be increased by 3.65 million zlotys (882,180 euros), or nearly 20 percent.
The future plans of the IPE are related with continuation of work on the preparation of construction project of the Brody-Plock (Adam's gate) oil pipeline, which is an integral part of the Euro-Asian Oil Transportation Corridor (EOTC), according to the CEO.
A part of these funds will be spent on the preparation of a new feasibility study of the construction project. This is connected with a period of time that has elapsed since the previous feasibility study preparation, and the need to take into account certain changes that have taken place on the oil market in recent years.
Skripka said that another part of the funds will be directed to the completion of work on spatial planning of the pipeline route on the territory of Poland.
He said that the plans for land use and development for the pipeline route will be prepared in consultation with the local government in nine administrative units in Poland, which had no such plans to date.
After completion of this stage, the entire route will be assigned to the project, said the CEO.
"With this in mind, the actualization of the feasibility study will take approximately six months," said Skripka. "Preparation of local land use plans can take about a year and a half."
Earlier, funds in the amount of about 120 million euros were reserved within the framework of the EU "Infrastructure and Environment" program in order to support the project.
However, the possibility of using these funds was lost because of the Polish side. The reason is that according to the regulations of the general meeting of Sarmatia International Pipeline Company participants, the decisions can be taken only on a unanimous basis.
The Brody-Plock (Adam's gate) oil pipeline is currently the sole missing part of the Euro-Asian Oil Transportation Corridor (EOTC).
As a result of realization of this project, the Caspian states will receive an additional reliable route for their oil supplies to the European market, new customers, and opportunities to work in adjacent markets will also expand.
The studies on the choice of a route for the future Brody-Adam's gate oil pipeline have been completed. The route's total length will be 377 kilometers, some 120 kilometers of the pipeline being built in Ukraine, and 257 kilometers in Poland.
The participants of Sarmatia are: the State Oil Company of Azerbaijan (SOCAR), Georgian Oil and Gas Corporation Ltd. (GOGC), Ukrainian UkrTransNafta, Polish Przedsiebiorstwo Eksploatacji Rurociagow Naftowych Przyjazn S.A. and Lithuanian AB Klaipedos Nafta. The share of the main participants is 24.75 percent each, while the Lithuanian company has a one percent share.
Odessa-Brody oil transport project was aimed at diversification of the oil supply to Ukrainian refineries and developing the country's transit opportunities. The construction of Odessa-Brody was completed in May 2002.
The length of the pipeline is 674 kilometers, while the diameter of the pipe is equal to 1,020 millimeters.
Edited by CN
Follow the author on Twitter: @MaksimTsurkov