22.07.03

Ukraine, Kazakhstan to increase terminal capacity for Kazakh oil exports

Ukraine and Kazakhstan have agreed to build a 52-km oil pipeline parallel to the Odessa-Brody trunk pipeline, which will run to the Yuzhny oil terminal. The sides will also build a second dock at the terminal to receive up to 8 million tonnes of Kazakh oil a year.

Ukrainian Fuel and Energy Minister Serhiy Yermilov made this announcement at a press conference summing up the results of the 5th session of the Ukrainian- Kazakh economic cooperation commission in Kyiv on Thursday.

"Kazakhstan has a share in this project and will provide the necessary financing," Yermilov said.

The construction of a parallel pipeline will make it possible to avoid operating the existing pipe in reverse mode, which is now being done to transit Russian oil, the minister said.

He explained that Kazakhstan has expressed its firm plans to fill the Pridneprovie trunk pipelines to use this part for oil export without hurting interests of Odessa-Brody direct pipeline.

Yermilov also said that the sides discussed possibility of transporting Kazakh oil through Odessa-Brody pipeline.

"The sides are interested in developing cooperation to operate the Odessa-Brody pipeline and have expressed interest in Kazakhstan's participation as an investor in the Brody-Plotsk pipeline", the minister said.

He said that Kazakhstan's share would be defined during further negotiations, after examining a feasibility study for the project.

Kazakh Energy and Mineral Resources Minister Vladimir Shkolnik said that the republic plans to increase oil production from 52 million tonnes at present to 150 million -170 million tonnes a year by 2015.

At the moment Kazakhstan's oil consumption amounts to 8.5 million tonnes of oil and the remaining 44 million tonnes are exported, including 1.5 million tonnes - to Kherson refinery and 8 million tonnes - as a transit through Ukraine (Odessa).

The construction of the 674-km Odessa-Brody pipeline with pipe diameter 1020 mm and the Yuzhny oil terminal was completed in May 2002.

The capacity of the first stage of Ukrainian part of the Eurasian oil transport corridor is 9 million - 14.5 million tonnes of oil a year. In the future it is planned to increase this to 40 million tonnes.

Before a final option for the use of the Odessa-Brody pipeline is decided, a 52-km section is being used in reverse mode to transport Russian oil for shipment from the Yuzhny terminal. Moreover,Ukrantransnafta, owner of all the Ukrainian pipelines, has announced its plans to increase the capacity of the Kremenchug- Snegirevka-Yuzhny pipeline section from 4 million tonnes to 7 million tonnes a year.

(Interfax)