Iran News ...


4/5/07

Controversy erupts over Russian role in Odessa-Brody-Gdansk pipeline project

By Saeid Najar Nobari

Berlin, April 4, IRNA - Demands by Kazakhstan to include Russia in the Odessa-Brody-Gdansk pipeline project could overshadow next month's Caspian sea energy summit in the Polish capital Warsaw.

Kazakh President Nursultan Nazarbayev who has expressed his country's interest in joining the 500-million euro pipeline project, insisted that Russia must be included in the plans following his recent talks with Polish President Lech Kaczynski in the Kazakh capital Astana.

Poland is planning to host a two-day Caspian oil summit on May 11 in Warsaw where the heads of states Azerbaijan, Georgia, Kazakhstan and Ukraine will discuss the transport of crude oil into the European Union zone.

Kaczynski said Thursday that he still believes the Odessa-Brody- Gdansk oil pipeline, which would transport Caspian oil west to Poland and Europe, could be operational in 2011 - despite logistical problems and calls by Nazarbayev for Russia's inclusion.

"I think that 2011 is realistic for the Odessa-Brody pipeline to become operational because this is the year when the capacity of transporting Caspian oil through the Bosporus Straight will be exceeded," Kaczynski said during a joint news conference with Nazarbayev.

"The pipelines in this region also have limited capacity so an opportunity will appear for the Odessa-Brody-Gdansk pipeline to transport Caspian oil." Kaczynski added that Poland is not only ready to transit the Caspian crude, but also to refine it.

"I hope that politics won't be a barrier here," he said.

The Polish president said earlier he was "very optimistic" about plans to complete the Odessa-Brody-Gdansk oil pipeline ultimately aimed at piping Caspian crude to the Polish Baltic Sea port city of Gdansk from where it could be shipped to Germany and other EU states further west.

"This is a great strategic venture," added Kaczynski who is presently visiting energy-rich Kazakhstan and Azerbaijan in a bid to secure Polish access to the oil fields of the Central Asian countries.

The project is geared at lowering Polish, Ukrainian and Georgian dependency on Russian energy sources.

Both Polish and Ukrainian oil supplies were severely affected by a commercial row between Russia and Belarus last January, which led to the temporary closure of the main transit pipeline to Europe.

Warsaw has openly accused Moscow of using its energy reserves as means of blackmailing its western neighbours.

Polish leaders have repeatedly indicated that they are keen on developing a commercial relationship with Russian energy suppliers, without monopolies, price-fixing or blackmail.

Poland has previously criticized Russia for cutting gas supplies to Ukraine in a price dispute, and for signing a major deal with Germany to build the Baltic Sea gas pipeline bypassing Poland.

The extension of the 673-kilometer Odessa-Brody pipeline which was finished in 2002, could help bring Caspian oil to Poland, thus bypassing the Russian supplier.

The completed pipeline would supply PKN Orlen, Central Europe's leading fuels refiner and distributor, with Caspian crude oil.

Based in the Polish city of Plock, PKN Orlen which is still partly owned by the Polish state operates in Poland, Germany and the Czech Republic and is also in the process of purchasing Lithuania's leading refiner Mazeikiu Nafta.

The Odessa-Brody project was conceived in 1992, and offers an innovative way to get oil to the northwest, to the giant Russian Druzhba pipeline that supplies oil to Western Europe.

The Druzhba pipeline can presently deliver 14.5 million tons of crude a year, and with the addition of pumping stations, it will be able to pump up to 45 million tons.

The primary advantage of the Odessa-Brody route is that it allows exporters to avoid major transit bottlenecks.

The main strategic importance of the Odessa-Gdansk pipeline is as a revenue producer since charging transit fees can help spur development in the economically-depressed post-Soviet states.

... Payvand News - 4/5/07 ... --



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