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Minister: Azerbaijan can transport about 8 million tons of oil via Odessa-Brody Pipeline

Oil&Gas Materials 9 December 2010 18:44 (UTC +04:00)

Azerbaijan, Baku, Dec.9 / Trend E. Ismayilov /

Azerbaijan proposes pumping about 8 million tons of oil per year into the Odessa-Brody Pipeline in the direction to Ukraine, Ukrainian Fuel and Energy Minister Yuriy Boyko said in an interview with the Uryadoviy Kurer newspaper this week.

According to the official, the project will be profitable once at least 10 million tons per year are pumped through the pipeline.

"Today, we have several options for its loading," he said. "Along with the existing option in the reverse mode, and pumping Russian oil, Belarus has proposed the transit of Venezuelan crude in the amount of about 5 million tons per year and Azerbaijan has proposed supplying about 8 million tons of oil per year to Ukraine in this mode."

According to the minister, if the proposals are backed by urgent contracts guaranteeing a high amount of oil pumped per year from these sources over several years, then they will become the economic basis of the pipeline's operation in this mode.

Boyko also noted that, taking into account international research prospects on oil market development in Europe, as well as increased oil production volumes in the Caspian region, transporting oil to European customers via the Odessa-Brody-Plotsk route is strategically important not only for Ukraine, but also for Europe.

However, at the same time, as the minister said any pipeline - either oil or gas - can only operate given a guaranteed load of oil over a certain number of years.

The Odessa-Brody oil transportation project sought to diversify oil supplies to Ukrainian refineries and develop the country's transit potential. The pipeline's construction 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.

During the first two years after the pipeline's construction, Ukraine unsuccessfully tried to negotiate on the transportation of Caspian oil in the forward direction. Not receiving any concrete proposals from foreign companies, the Ukrainian government authorized the use of pipeline for transporting Russian oil in the reverse direction in late June 2004.

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