30.05.03

Odessa-Brody oil pipeline may be used in reverse mode - Kuchma

Ukraine will be guided by its national interests in discussing ways to use the Odessa-Brody oil pipeline, President Leonid Kuchma told a news conference in Kyiv on Wednesday.

The pipeline's presentation in Brussels was a success, he said.

The European Commission supports the intended use of the pipeline and will appropriate two million euros for a feasibility study on extending the pipeline into Poland, Kuchma said.

"My position is, however, that we must know to what extent the pipeline will be used. If we are told that oil will not flow through it until five to ten years from now, we should probably do nothing," he said.

Numerous Russian and British companies have suggested that the pipeline should be temporarily used in reverse mode until significant volumes arrive from the Caspian region, Kuchma said.

"However, at the moment I cannot say what the final decision will be," he said.

"What I am sure of is that the pipeline is bound to be needed, because the itinerary of moving Caspian oil to Europe is one of the most promising," Kuchma said.

Kuchma said that he plans to meet on June 11 with British Petroleum President John Brown to discuss ways of using the pipeline.

"If proposals interesting to Ukraine are forthcoming, then why not? As far as I know, they are prepared to pump 14 million tonnes of oil annually through the pipeline until Caspian oil arrives," he said.

Ukraine is guided by economic rather than political considerations in discussing ways to use the Odessa-Brody pipeline, Kuchma said.

"The price of oil is high. Russia wants to make good use of this period and sell as much oil as possible, while we want the pipeline to be used to capacity so as to increase budget revenues," he said.

If the European Commission offers Ukraine a better deal, "we will jump at it," Kuchma said.

The European Commission has the potential for this, he said. "On certain occasions it has financed stand-by systems," he said.

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

From January-May 2003, Ukrtransnafta transported 9 tankers with 767,000 tonnes of oil from the Yuzhny terminal, and paid 40 million hryvnas into the Ukrainian budget for use of the terminal and a 52-km stretch of the Odessa-Brody pipeline.

The Odessa-Brody pipeline (674 km long and 1,020 mm in diameter) and the Yuzhny oil terminal were completed in 2001.

(Interfax)