Odessa-Brody oil line reversal nears completion

The Odessa-Brody oil pipeline will start carrying light crude oil in its originally-planned direction from the Caspian Sea toward Europe this summer, according to a senior Ukrainian official.

May 12th, 2008

Eric Watkins
Senior Correspondent

LOS ANGELES, May 12 -- The Odessa-Brody oil pipeline will start carrying light crude oil in its originally-planned direction from the Caspian Sea toward Europe this summer, according to a senior Ukrainian official.

Oleh Dubyna, chairman of state oil and gas company Naftohaz Ukrayiny, expects the pipeline to carry Caspian crude by July, saying that state oil pipeline operator Ukrtransnafta already is purchasing 485,000 tonnes of light oil to facilitate the pipeline's reversal.

The Odessa-Brody pipeline was originally built to transport light Caspian crude oil to Europe, but it has never operated as planned. Instead, it has worked in the reverse direction, carrying Russian oil to Odessa.

The planned reversal is part of a larger project aimed at extending the Odessa-Brody pipeline and using it to supply Europe with oil from the Caspian Sea region.

Last October, five former members of the Russia-dominated former Union of Soviet Socialist Republics—Azerbaijan, Georgia, Lithuania, Poland, and Ukraine—agreed to set up the so-called "Samartia" consortium (OGJ Online, Oct. 12, 2007).

Its goal is to enable transportation of oil from the Caspian Sea region, particularly Azerbaijan and possibly Kazakhstan, through Poland to markets in western Europe.

The countries in the Samartia consortium want to diversify Europe's sources of oil. Most European countries rely heavily on supplies from Russia, but they fear that Russia could leverage its near-monopoly status for political advantage.

In April, oil company officials from Ukraine and Poland signed an agreement authorizing a feasibility study for a new oil network that would extend the Odessa-Brody pipeline from Ukraine to Poland.

The plan calls for the extension of the pipeline to the central Polish city of Plock, site of the country's largest refinery, allowing new supplies to be shipped onward to Poland's Baltic Sea port of Gdansk.

Contact Eric Watkins at hippalus@yahoo.com.

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