Ukrtransnafta, the state‑owned manager of the Odessa‑Brody oil pipeline, has claimed it may have its first customer for the pipeline, still idle three months after being proclaimed operational by Ukrainian officials.
Ukrtransnafta said that the Czech state oil refinery Ceska Rafinerska is interested in receiving up to 400,000 tons of Caspian Sea crude oil between October and December this year. If the two sides can hammer out a deal, that oil will traverse Ukraine.
The Odessa‑Brody pipeline runs from the Black Sea port of Odessa up to the Polish border. Since the pipeline’s long‑delayed completion last year, the only oil to go through it has been for test purposes. Now, it may have a customer.
“It is not the only client we held negations with,” said Mykailo Honchar, an Ukrtransnafta adviser. “There are also other companies we are talking to.”
Honchar declined to name the companies.
There has been concern in some quarters that the country would have difficulty finding customers for the pipeline. During a roundtable discussion on May 17, U.S. Ambassador Carlos Pascual said that developing the pipeline’s commercial realities might be a greater challenge that its engineering aspects.
Landing a large customer for the pipeline would go a long way toward proving the pipeline’s commercial viability.
Further talks with the Czech refinery were to have taken place this week, but were postponed due to the flooding in Prague.
“We look forward to our first commercial contract,” said Honchar.
On Aug. 5, an oil tanker began offloading 3 million tons of Caspian oil at the Yuzhny Oil Terminal near Odessa. The oil, used to test the pipeline, was purchased from Kazakhstan’s Tengizchevroil for Hr 40 million.
“We bought it for our personal use and to prove that we can pump oil from Odessa to Brody and back,” said Honchar, adding that it was necessary to pump the oil back to Odessa to show Russian companies that oil could be sent from Brody to Odessa.
Ukrtransnafta is also talking with Poland’s Golden Gate consortium about extending the pipeline 500 kilometers to Plotsk. The two sides, which last met on Aug. 13 in Warsaw, agreed to move ahead with the project. The route the extension would take remains unresolved.
The Institute of Oil Transportation is representing Ukraine in the negotiations, and Gazprojekt represents Poland.
Honchar said that a tender is being developed to retain a developer for the extension.
The Odessa‑Brody pipeline is only one leg of the so‑called Euro Asian Oil Transport Corridor ‑ an international project that will facilitate the transportation of Caspian oil to Europe without transiting Russia.
The pipeline is capable of handling 40 million tons of oil per year ‑ more than double the 16 million to 19 million tons Ukraine consumes each year. The increased oil flow would benefit Ukraine, which is dependent on Russia for most of its oil.
