Odessa-Brody-Plock pipeline is rentable

17:02, 03 April 2006
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Already the first year of operation will make a profit.

Transportation of the Caspian oil by pipeline from Odessa through Brody to  the Polish town of Plock and then further to the Western Europe is rentable, according to New Europe.  And already the first year of operation will make a profit, the  international consultative consortium said last week as it presented a  business plan to representatives of the Polish and Ukrainian governments, the European Union, and interested firms at the presentation of the study.

RBK-Ukraine quoted Polish Minister of Economy Piotr Wozniakas as saying the pipeline lengthened from Odessa to Plock could begin to operate in 2009. For that it is required to invest to its completion about USD 450-500 million, Radio Liberty reported.

The International Consultative Consortium, which conducted the study, advised to lay the Polish section of the Odessa-Brody-Plock pipeline by the shortest way making a detour from Warsaw from its northern side, not as it has been proposed earlier through the southern densely-populated regions.

This variant will diminish the costs of the projects by USD 100 million and will accelerate the process.

The European Union backs up the project of the pipeline signed by Poland and Ukraine in 2003. Secretary for issues of energy engineering and transport of the EU Commission, Fauzi Bensarsa, expressed hope that a new pipeline would be connected to the existing network of the Druzhba oil pipeline, by which Russian oil comes to Germany.

Polish-Ukrainian Consortium Sarmatia was established to construct and operate the Odessa-Brody-Plock pipeline. Its co-chairman from the Polish party, member of the administration board in the Enterprise for Operation of Oil-Pipelines (PERN), Cezary Levandowski, in the talk from Radio Liberty confirmed the forecasts of the Polish minister.

"In fact, if the conditions were favourable, this project would be recompensed already during the first year of operation. That is that further on it would make a profit," he said.

Lewandowski said he hopes that the European Union will take part in the financing of the project. The European Investment Bank is interested in providing credit.

Europe has approved the final project of completing the Odessa-Brody pipeline. A consortium of companies - SWECO PIC, ILF GmbH and KANTOR - has presented a frame project of completing the Odessa-Brody-Plock works which are financed by the European Union.

Bensarsa stated in Warsaw on March 15 that the European Commission reckons on the first deliveries of the Caspian oil by the Odessa-Brody-Plock route in 2009. "We reckon on the beginning of operation of the pipeline in 2009," said Bensarsa said. By the estimations of the European experts the construction of the pipeline will take about 18 months.

Bensarsa has emphasised that conducted researches are evidence of the  growing market of consumers of the Caspian oil in Europe and the increase of its production at the Caspian Sea, which guarantees that the project has prospects.

He emphasised as well that the issue of diversification of energy carriers is one of the most actual for the European Union, noting, that the pipeline will make it possible to increase the energy independence of the EU. He added that the European market of oil consumers differs by high paying capacity.

According to Bensarsa, the international consortium advises to complete the Ukrainian oil pipeline Odessa-Brody to Polish Ozhechowo. He has noted that from Ozhechowo to Plock a pipeline was laid, which may be used to deliver the Caspian oil by the Odessa- Brody-Plock route.

By Bensarsa`s data, this route has been chosen from five alternatives as it is the shortest and make it possible to save USD 100 million in the construction of the pipeline and pump stations. Bensarsa said the Brody-Ozhechowo is shorter than the other routes by 70 kilometres.

Bensarsa has refused to give the price for the construction of this section, noting that promulgation of these data are the prerogative of the state oil-transportation companies of Ukraine and Poland - Ukrainian joint stock company Ukrtransnafta and Poland`s Pern Przyjazn.

Ukrtransnafta Press Secretary Oksana Balyun said the Brody-Ozhechowo route is the most simple as it does not come through rivers and nature conservation areas in Poland. Ukrtransnafta has earlier stated that USD 350-450 million in investments will be required for completing the Odessa-Brody pipeline to Plock.  

The news was monitored by The Action Ukraine Report (AUR) Monitoring Service, Morgan Williams, Editor.

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