25.06.03

Ukraine waiting for EU move before rejecting reverse use of Odessa- Brody pipeline

Ukraine will not use the Odessa-Brody pipeline in reverse if the European Commission takes concrete steps for the direct use of the pipeline, Ukrainian President Leonid Kuchma said at a press conference in Odessa on Tuesday.

"There will be no reverse if the we have concrete steps from the European Commission, and not just declarations, for the pipeline to operate," he said. The president also noted that "not one company that works in the Caspian region has expressed a desire to transport oil via this corridor."

The president stressed that Ukraine, after it invested $500 million in this pipeline, approached Poland with a proposal to extend the pipeline to Gdansk. The Polish side asked reasonable questions regarding the source of oil and its price at the Ukrainian-Polish border. "Whoever built it did not think of this," Kuchma said.

However, he expressed the hope that the Odessa-Brody pipeline project, including its extension to Gdansk, would have potential. "The main task is for the pipeline to operate to the benefit for the Ukrainian economy," he said.

As reported earlier, the companies Naftohaz Ukrayiny, Ukrtransnafta and Russia's Tyumen Oil Company and Transneft signed a protocol of intent in Moscow on April 23 to organize a new export route for Russian oil through Ukraine, using the Odessa-Brody pipeline in reverse to export an additional 9 million tonnes of 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. The U.S. and the European Commission support the direct use of the Odessa-Brody pipeline.

The first phase of the pipeline was launched in May 2002. It has a capacity of 9 million - 14.5 million tonnes of oil per annum and a reservoir capacity of 200,000 cubic meters. The Yuzhny terminal is capable of handling tankers with deadweight of up to 100,000 tonnes. It is planned to expand the capacity of the pipeline to 40 million - 45 million tonnes per annum and to increase the reservoir capacity to 600,000 cubic meters.

(Interfax)