Ukraine, Belarus sign agt on tansit of oil by Ukrainian Odessa-Brody pipeline

KIEV, January 17 (Itar-Tass) -- Ukraine and Belarus have signed an agreement on the transit of four tonnes of oil by the Ukrainian Odessa-Brody pipeline system to the Mozyr refinery in Belarus annually in 2011-2012.

The services agreement was signed on Monday, January 17, by Ukrtransneft CEIO Alexander Lazorko and Belarus Oil Company Deputy Director general Andrei Shishko.

The agreement can be extended and the oil transit can grow to eight million tonnes a year.

Ukrainian Minister of Energy and Coal Industry Yuri Boiko said "the signing of the agreement is an important stage in the energy policy of Ukraine."

"We are opening a new route of oil transportation to Mozyr," he said.

"The agreement does not affect the interests of our Russian partners in any way. Nor does it affect supplies to Europe which [they] make through our country," Boiko added.

The first trial shipment of oil was successfully transported by the Odessa-Brody pipeline to the Mozyr refinery in Belarus in late November.

"The direct transportation of oil by the Odessa-Brody pipeline to the Mozyr refinery via the Druzhba trunk pipeline, started on November 20, was successfully finished at around midnight Tuesday," Belneftekhim spokeswoman Marina Kostyuchenko told Itar-Tass earlier.

She said that no problems had arisen with the transportation of Russian oil to Western consumers during this period. "The pipelines were not used to their maximum capacity. The concerns expressed to this effect by some foreign specialists proved wrong," she added.

The pipeline transported 24,000 tonnes of oil daily during the trial run. The Mozyr-Brody-2 pipeline transported oil to Hungary, Slovakia and the Czech Republic at the same time at a rate of around 50,500 tonnes.

In late October, a contract was signed in Minsk for a trial shipment of oil by the Odessa-Brody pipeline in the direct mode. Also a contract was signed for the transportation of oil by the pipeline in the same mode in 2011-2013 and on oil supplies to Belarus on swap terms.

According to different sources, Belarus does not rule out swap oil supplies from Ukraine, Kazakhstan and Iran.

The Odessa-Brody pipeline is currently operating in the reverse mode in the direction of Black Sea ports. The pipeline carries around 105 million barrels of oil per year.

The Odessa-Brody pipeline is a crude oil pipeline between the Ukrainian cities Odessa on the Black Sea and Brody near the Ukrainian-Polish border. There are plans to expand the pipeline to Plock, and furthermore to Gdansk in Poland. The pipeline is operated by UkrTransNafta, Ukraine's state-owned oil pipeline company.

The usage and direction of Odessa-Brody pipeline is considered to be of considerable geopolitical significance and has been the subject of both political disagreement and international pressure. The pipeline was originally intended to reach Gdansk in order to transfer oil from the Caspian Sea (mainly from Kazakhstan) to the Polish Baltic Sea port and from there to the rest of Europe.

The Pivdenny maritime terminal in Odessa and the pipeline between Odessa and Brody were built in May 2002 by Ukrnaftogazbud and operated by UkrTransNafta. UkrTransNafta was established to develop the commercial attractiveness of the Odessa-Brody pipeline. However, the pipeline remained unused until 2004.

As sufficient capacities of oil supplies were not agreed, in July 2004 the Ukrainian government accepted Russian oil companies' proposal to reverse the pipeline flow to make it transfer Russian oil southwards to the Black Sea and from there to Mediterranean destinations.

Currently the oil is shipped to the pipeline from the junction of the southern branch of the Druzhba pipeline. In March 2010, Ukraine's ambassador to Belarus proposed the pipeline begin operating in the averse direction in order to deliver Venezuelan crude to Belarusian refineries.


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