02.06.03

Kyiv forecasts Odessa-Brody profits by start of 2004

Ukrtransnafta plans to begin to start transporting 4.5 million - 5 million tonnes of Caspian oil through the Odessa-Brody pipeline at the end of this year - start of 2004, which will ensure the project's profitability, company CEO Alexander Todiichuk said at a press conference in Kyiv.

He said that by the end of July PricewaterhouseCoopers would complete the preparation of a business plan for the transit of Caspian oil through this route, which will include protocols of intent or concrete agreements with oil companies to transport oil.

The Ukrtransnafta chief noted that the Czech refinery Ceska Rafinerska is still interested in this route and is ready to receive 2 million tonnes of oil per annum. Todiichuk said that he also received support from the State Oil Company of the Azerbaijani Republic (SOCAR) at a presentation of the project in Brussels on Tuesday.

"Ukrtransnafta is holding talks with oil refineries in Poland and the main owners of Caspian oil - ChevronTexaco and BP," he added.

He said that thanks to low rent payments and port charges, the profitable zone for supplies of Caspian oil through the Odessa-Brody pipeline has increased significantly.

"We have never been this close to a positive result," Todiichuk said after the presentation in Brussels.

Meanwhile, Ukrainian President Leonid Kuchma said that he sees nothing wrong in the unused pipeline being used temporarily in reverse, to transport Russian oil. As reported earlier, in April 2003 Tyumen Oil Company signed a protocol of intent with Naftohaz Ukrayiny to transit 9 million - 14 million tonnes to the Yuzhny terminal through the Odessa-Brody pipeline.

Construction of the Odessa-Brody pipeline, which stretches 674 km and has a diameter of 1,020 mm, was completed in May 2002.

In total the capacity of the first phase of the Ukrainian part of the Eurasian Oil Transport Corridor amounts to 9 million - 14.5 million tonnes of oil per annum. In the future it is planned to increase this capacity to 40 million tonnes of oil per annum

A 52-km section of Odessa-Brody pipeline is currently being used in reverse and Ukrtransnafta in January-May 2003 transported 9 tankers of oil from the Yuzhny terminal with 767,000 tonnes of oil. This has made it possible for the company to maintain the idle part of the pipeline and to pay about 40 million hryvna to the Ukrainian budget in the first five months of the year.

(Interfax)

U.S. thinks advantages lie in Odessa-Body pipeline direct use

The U.S. ambassador to Ukraine thinks advantages lie in routing oil direct along the Odessa-Brody pipeline, rather than using the pipeline in reverse mode.

"Ukraine currently imports all of its oil from Russia or via Russia, and Odessa-Brody represents a real opportunity both for Ukraine and Europe to diversify its energy resources," Carlos Pascual said at the 6th international conference on European Energy Security in the 21st Century in Kyiv.

Russia, too, has something to gain, Pascual said. "Odessa-Brody is not an anti-Russian project. It is a pro-Ukrainian project," he added.

He went on to say that Odessa-Brody would not compete with the Baku-Tbilisi-Ceyhan pipeline but would, on the contrary, complement it. "If Ukraine continue alone its chosen path, there is a real prospect of Caspian oil reaching the European markets via Ukraine by the end of this year."

Ukraine's Naftohaz and Ukrtransnafta, and Russia's Transneft and TNK April 23 signed a protocol on the reverse use of the pipeline to export an additional 9 million tonnes of Russian oil per annum.

Ukrtransnafta in January-May 2003 already transported 9 tankers of oil from the Yuzhny terminal with 767,000 tonnes of oil and paid 40 million hryvna to the Ukrainian budget from the use of the terminal and the 52-km Odessa-Brody pipeline.

(Interfax)