Sarmatia IPC: Ukrtransnafta- BOC cooperation will allow to expand "Odessa-Brody" pipeline in European direction

Azerbaijan, Baku, Nov. 30 / Trend E.Ismayilov /

The contract on oil pumping signed between the Ukrainian Ukrtransnafta and the Belarusian Oil Company (BOC) will allow to soon deploy the "Odessa-Brody" pipeline in the European direction, General Director of the Sarmatia International Pipeline Company (IPC) Sergei Skripka told Trend.

Under the agreement, the sides plan to begin a regular supply of oil via the pipeline in 2011 and implement within three years. Pumping volumes for the Odessa-Brody oil pipeline will be agreed later.

"We view the signing of this agreement as positive, at least based on the fact that it will shortly deploy the Odessa-Brody oil pipeline to begin its operation just in the very direction, which we expect, that is, in the European direction," he said.

The Odessa-Brody oil pipeline idling more than six months first started to work in direct mode on Nov.22. Ukraine sent oil via it to the Mozyr refinery in Belarus. Minsk forced to buy fuel from Venezuela because of the reduction of oil imports from Russia.

In early November, Ukrtransnafta and BOC have signed a contract to transport Venezuelan crude oil through Ukraine via the Odessa-Brody oil pipeline system. The agreement provides for the delivery of four million tons in 2010.

Skripka said the test pumping of oil through the Odessa-Brody pipeline towards Ukraine- Belarus showed absence of problems in exploitation of the pipeline in the European direction. In particular, one of the threads of the Druzhba pipeline was involved in the process of transportation, which also showed a trouble free security of oil supplies from Ukraine to Belarus directly through pipelines.

Recently, Belarusian President Alexander Lukashenko proposed that Azerbaijan deliver oil to the country through a "swap" scheme. He voiced the proposal at a meeting with State Oil Company of the Azerbaijan Republic (SOCAR) President Rovnag Abdullayev. The issue concerns transporting Azerbaijani oil to Belarusian refineries via the Odessa-Brody Pipeline to the Druzhba Pipeline and then to Belarusian refineries. The oil would replace the oil that Belarus currently buys in Venezuela. The sides would save on transport costs, Lukashenko said.

Regarding the work on the Belarus- Azerbaijan cooperation in the possible substitution of Venezuelan oil and transportation of Azerbaijani oil via the Odessa-Brody pipeline, Violin noted the attractiveness of this option.

"For us it would be even more interesting option, because in this case, Azerbaijani oil [...], on which we expect to rely in the future, would flow in the pipeline," he stressed.

The Odessa-Brody oil transportation project sought to diversify oil supplies to Ukrainian refineries and develop the country's transit potential. The construction of the pipeline was completed in May 2002. Its trunk has a length of 674 kilometers, with a pipe diameter of 1,020 millimeters. The capacity of the pipeline and the terminal is 9-14 million tons per year during the first stage.

Over the two years since the pipeline's construction, Ukraine has unsuccessfully negotiated the transportation of Caspian oil in the forward direction. As the country was unable to receive any concrete proposals from companies, the Ukrainian government authorized the use of pipeline for transporting Russian oil in the reverse direction in late June 2004.

Sarmatia was created under an oil transportation project via the Odessa-Brody-Gdansk-Plotsk route. Azerbaijan has the role of a major supplier. Azerbaijan can also operate as a transit country. Azerbaijan can supply its own oil, as well as oil from Central Asia.

Sarmatia's participants include SOCAR, the Georgian Oil and Gas Corporation Ltd. (GOGC), Ukrainian Ukrtransnafta, Polish Przedsiebiorstwo Eksploatacji Rurociagow Naftowych Przyjazn SA and Lithuanian AB Klaipedos Nafta.