Odessa-Brody oil pipeline commissioning is positive event in establishing Eurasian oil transportation corridor

Oil&Gas Materials 20 January 2011 17:28

Azerbaijan, Baku, Jan. 20 / Trend E.Ismayilov /

Commissioning of the Odessa-Brody oil pipeline in the project direction will accelerate the implementation of the project to create the Euro-Asian Oil Transportation Corridor, Sarmatia International Pipeline Company CEO Sergei Skripka said over phone.

Establishing the Eurasian oil transportation corridor involves the development of oil pipeline route Odessa-Brody-Plock-Gdansk.

Earlier JSC Ukrtransnafta and CJSC Belarusian Oil Company signed an agreement on transit of 4 million tons of light crude oil annually via the Odessa-Brody oil pipeline to the Mozyr refinery in Belarus by the Ukrainian side in 2011-2012. The agreement was signed with the possibility of further extension.

"If it deals with the agreement itself, it was signed for two years with the possibility of transporting 4 million tons a year. Perhaps, it will be Azerbaijani oil, which will be delivered in accordance with swap contracts instead of Venezuelan oil. From the standpoint of Sarmatia;s interests and the construction project of Eurasian oil transportation corridor is certainly a very positive development, " he said.

Earlier, the Belarusian Oil Company and Socar Trading signed a contract for the supply of Azerbaijani oil to Belarus in exchange for Venezuelan oil.

As opposed to the previous contract, existing between Ukraine and Belarus, this is a specific contract with guaranteed volumes of delivery.

According to the director general of the company, there were such questions as whether there is a guarantee that the oil pipeline Odessa-Brody oil pipeline will be deployed, whether it is available to transport Caspian oil to Poland and other European countries.

"Since the signing of this agreement, and certainly from the time when the pipeline will operate in the right direction, these questions will be removed", he said.

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 provided 9-14 million tons per year during the first stage.

Over the two years since the pipeline's construction, Ukraine unsuccessfully negotiated the transportation of Caspian oil in 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 reverse direction in late June 2004.