Pipeliners

February 04, 2009 - AFX News Limited - An oil pipeline intended to link the Caspian basin and Italy appears to be in doubt due to a lack of clear commitment from the partners, the head of Croatian oil pipeline operator Janaf said on Wednesday. Croatia, Romania, Serbia, Slovenia and Italy signed an agreement in 2007 on building the Pan-European Oil Pipeline (PEOP) to bring crude from the Caspian basin via the Romanian Black Sea port of Constanta to Trieste in Italy. First projections said it could become operational in 2012. "Croatia has done its part, in financial and organisational terms in this preparatory phase, but it seems that at this moment there is a lack of sufficient will for that project," Ante Markov, Janaf's chief executive, told a news conference. The PEOP's costs are estimated at between $2 billion and $3.5 billion. Some Croatian industry sources said earlier this year that the 1,400-km (870 mile) pipeline was unlikely to become operational before 2015 or even later, if at all. "Italy has not yet formally confirmed its participation in the project. Without Italy and the markets it serves, it doesn't make sense to build the pipeline," Markov said. Industry sources say Slovenia has voiced concern in talks with its potential partners about environmental protection of its sensitive karst terrain, through which the PEOP would run. Markov said that those interested in Caspian crude had shifted their focus to other pipeline projects. PEOP's envisaged annual capacity is 1.2-1.8 million barrels per day. Janaf, which is 75-percent owned by the state, its energy companies and other agencies, has a big portion of the Croatian transport facilities for PEOP already in place. Citing environmental concerns, Croatia all but dropped the Druzhba-Adria pipeline project which was meant to connect Russian oilfields with Croatia's northern Adriatic deep sea port of Omisalj a few years ago. Markov said Croatian and Russian energy officials and experts would meet in Moscow next week and will discuss potential projects involving trade and supply of oil.