Azerbaijan, Baku, July 12/ Trend E.Ismayilov/
The implementation of the land buying process and preparation of the working project on construction of the Brody-Plock oil pipeline requires an increase in the authorised capital of the Sarmatia international pipeline enterprise, general director of ICC Sergei Skripka told Trend on Thursday.
In accordance with the project's preparation plan, the implementation of land allocation procedure under the pipeline's construction is important. The signing of agreements with the owner of over 8000 land plots on the oil pipeline route in Poland is expected within the framework of the procedure. Nevertheless the Poland government hasn't provided the adoption of the law 'On energy corridors' which was envisaged for simplification of land allocation issues.
The Ukrainian legislation protects public interests and supports investors which carry out strategic, socially important infrastructure projects. So the ICC in Ukraine does not expect significant difficulties with land allocation, Skripka said.
The launch of the preparatory work for construction of the oil pipeline project in the current year is also important, according to him. The indicated stages are costly enough and require increasing the ICC Sarmatia authorised capital by the co-founders, Skripka noted.
The authorized capital of Sarmatia ICC is 4.65 million euros as of today. About 15 million euros of an increase in the company's capital is expected in the current year in order to finance the preparation work.
The Polish co-founder of the Sarmatia ICC- PERN Przyjazn oil Transport Company relates its position towards the capitalisation with the adoption of a decision on the realisation of the project at governmental level and with corresponding intergovernmental agreements. Such a position is objective, as PERN Przyjazn is under absolute state control.
"The position of the Polish government towards the project is not completely clear. Significant changes in its attitude to the issue of preparation of a multilateral intergovernmental agreement on its support for the Euro-Asian oil transport corridor ( EAOTC) is indicative ," Skripka noted.
This agreement according to the experts of famous companies such as PricewaterhouseCoopers, Granherne and ILF, should be a legal basis for the functioning of the future oil transport corridor giving guarantees to the participants of the project, to investors and users of the infrastructure to be established, Skripka said.
Namely such an agreement paves the way for the signing of commercial agreements between oil suppliers and customers, as well as contracts for transportation.
The project on construction of Baku-Tbilisi-Ceyhan oil pipeline can be an example of the significance of an agreement on the realisation of the international infrastructure project.
"The Minister of Industry and Energy of Azerbaijan Natig Aliyev also stressed the importance of signing an intergovernmental agreement during the conference held in April of this year in Krakow. Other participants of the project also support this stance," ICC director said.
Poland, for its part considers that signed intergovernmental agreements are not a prerequisite for the realisation of an EAOTC project, according to Skripka. It is necessary to conclude commercial agreements on oil supply, according to him.
"Nobody denies the importance of those contracts, but this approach is like trying to put the cart ahead of the horse. It is unlikely that commercial subjects will take all the risks related to the project without having intergovernmental guarantees," he noted.
Skripka expressed his hope that, the situation will become clearer after discussion of financing issues during the multilateral consultations by representatives of the project's member states and after the bilateral meeting between the Minister of Energy and Coal Industry of Ukraine and Minister of Economy of Poland. Multilateral and bilateral meetings in accordance with Ukraine's proposals would take place until the end of June. However, Poland hasn't responded to the proposals so far, according to Skripka.
Sarmatia" ICC was established on July 12 of 2004 by Ukrtransnafta and the Polish company PERN Przyjazn to attract investment towards the design and completion of the Odessa-Brody pipeline to Plock.
Exploration on the selection of the road for the future pipeline has already been completed. The length of the route will be 377 kilometres; 120 kilometres of the oil pipeline will be built in the Ukraine and 257 kilometres in Poland.
The project of construction of the Brody-Plock oil pipeline was included in the operational programme of the European Commission entitled 'Infrastructure and environment' as being a priority project.
About 495 million zloties (approximately 177 million dollars) were reserved for this programme.
Members of Sarmatia are SOCAR ( State Oil Company of Azerbaijan), the Georgian Oil and Gas Corporation Ltd. (GOGC) of Georgia, UkrTransNafta of Ukraine, Przedsiebiorstwo Eksploatacji Rurociagow Naftowych Przyjazn S.A of Poland and AB Klaipedos Nafta of Lithuania with a 24,75 per cent of the share for each primary participant and one per cent for the Lithuanian company.
The Odessa-Brody oil transport project was planned with the aim of diversification of oil supplies to Ukrainian oil refineries and developing the countries' transit opportunities.
The construction of Odessa-Brody oil pipeline was completed in May of 2002. It traverses 674 kilometres of road with a tube diameter of 1020 mm.
The first stage capacity of the pipeline and the terminal is 9-14 million tons per year.