Pipeliners

MOSCOW, January 25 (RIA Novosti) - Ukrainian President Viktor Yushchenko believes that the agreement on the reverse of the Odessa-Brody oil pipeline meets Ukraine's interests, but these interests could change with time. In response to journalists' questions, the Ukrainian President said that the construction of the oil pipeline between Odessa (a port on the Black Sea) and Brody (on Ukraine's western border with Poland) has been "a unique project for the past few years." "This project can be perspective if all its components, including transportation to Novorossiisk (a Russian port on the western coast of the Black Sea) function properly," Mr. Yushchenko said. He said that at the time when he was the head of the government, Ukraine financed 58% of the cost of the project. "I could not understand how the finished oil pipeline could stand idly without pumping oil in either direction," he said. According to Mr. Yushchenko, the question of using this pipeline in the reverse direction "was much too politicized." "This is a temporary agreement which meets Ukraine's interests today," Mr. Yushchenko said regarding the recently signed agreement on the reversing of the Odessa-Brody pipeline. "But if tomorrow our interests change and the need appears to return to the initial project, we shall use it as it was initially designed." Ukraine completed the construction of the Odessa-Brody oil pipeline at the end of 2001. Nevertheless, the pipeline, which was designed to pump 14 million metric tons of oil a year to Europe, bypassing the Turkish straits, was not used because Kiev could not find raw material suppliers. Russian companies interested in increasing their oil exports to the European market proposed that Ukraine should use the oil pipeline in a reverse direction - from Brody to Odessa. At first, the Ukrainian authorities declined the proposal. However, on July 5, 2004, the Ukrainian government made the decision toremove limits on transporting oil along the Odessa-Brody pipeline exclusively in one direction. The supervisory council of the Ukrainian oil transportation company, Ukrtransnafta, on July 8, 2004 allowed the company's board to conclude contracts with Russian-British TNK-BP on filling the Odessa- Brody pipeline. The supervisory council approved the signing of the credit agreement, which provided for an annual output of up to nine million metric tons of oil through the Odessa - Brody pipeline in a reverse regime, following the principle: "either transport of pay." Under the terms of the agreement, the Ukrtransnafta company has the right to refuse to pump Russian oil and start pumping Caspian oil. In this case, however, it will have to repay the credit early. The other day, the Ukrainian government annulled its decision that provided for the exclusive routing of Caspian oil through the Odessa-Brody pipeline.