Company news in June 2004 | |||
TNK-BP Not Refusing to Supply Oil through the Odessa/Brody Oil Pipeline in Reverse Mode
The Russo-British TNK-BP has not changed its position with respect to the Odessa/Brody oil pipeline use and still considers its "reverse" direction as the most viable, informed Mr. Alexander Gorodetsky, President of TNK-Ukraine trading house. In his words, "we are not getting back on our proposal (as to the oil pipeline reverse use – IF). Just as before, we consider it as the most realistic and viable for this pipeline. We made available all materials drafted for the project''s implementation to the Ukrainian Government, and we have written numerous letters to confirm TNK-BP''s willingness to work in this direction." Commenting on the Ukrainian Government''s proposal to Russia concerning the Odessa/Brody oil pipeline use in the direct direction, Mr. Gorodetsky said that Russians are not interested in transportation of light Siberian oil, which is not supplied through the port of Tuapse to a Czech refinery at Kralupy and to German refineries in Wogburg and Ingolstadt, through the Odessa/Brody oil pipeline to East European refineries. In the opinion of Mr. Gorodetsky, Russians believe, in particular, that the oil cannot be supplied through the oil pipeline to those European refineries that were ready to accept Kazakh oil. For instance, the Kralupy refinery cannot refine light Siberian oil with high sulphur and metal content due to its technological basis. Such oil has been traditionally consumed in Israel, Turkey, Greece, and Italy but it has never been supplied to Central Europe due to its quality and to the absence of infrastructure for this grade. In addition, numerous technical approvals would have to be obtained for Siberian oil transportation at all stages of its passage, including reversing of the IKL Ingolstadt/Kralupy/Litvinov oil pipeline, subsequent pumping through a portion of the Druzhba pipeline, plus many other details, said the President of TNK-Ukraine Trading House. He noted that subsequent oil pumping means alternate pumping of light and heavy oil through one and the same oil pipeline to preserve its properties. This would trigger technical difficulties and require extra investments into the looping system construction and oil storage facilities development. It is also important that the "Siberian light" oil grade only accounts for some 7%-8% of oil extracted in West Siberian fields, and as little as 50% of this volume is exported through the Black Sea ports, Mr. Gorodetsky emphasized. Such volumes are too insignificant for Russian petroleum companies and Transneft to consider them as a strategic source and to look for ways to optimize their transportation economics, he said. As reported earlier, Russian Industry and Power Engineering Minister Victor Khristenko stated in response to a letter from the Ukrainian Fuel and Power Engineering Minister Sergey Tulub that Russia was not interested in the Odessa/Brody operation in the direct direction. The first stage of the Odessa/Brody oil transportation system was commissioned in May 2002. Its throughput amounts to 9-14.5 million tons of oil a year. The idea is also to expand the oil pipeline''s capacity to 40-45 million tons of oil a year. TNK-BP has proposed to Ukraine to supply 380,000-420,000 tons of Russian technological oil of Urals grade as a three-year commodity credit to fill the Odessa/Brody pipeline and to provide up to 9 million tons of oil for pumping annually. The Ukrainian Government resolved to use the Odessa/Brody oil pipeline in the direct direction on February 4. As part of this resolution, the Government has set up a task force that will address the problems of the oil pipeline joint use with crude oil owners. The Government also supported a bill for the Odessa/Brody oil pipeline and the Yuzhny marine oil terminal concession.
Source: INTERFAX