Ukraine can offer new transit route for Azeri oil – energy minister

Ukraine can offer new transit route for Azeri oil – energy minister

Ukraine could offer a new transit route for oil exports from Azerbaijan, the Ukrainian energy minister said Wednesday.

The post-Soviet Caspian nation, rich in hydrocarbon resources, currently pumps its oil and natural gas to foreign markets through three pipelines running from Baku to the Turkish port of Ceyhan, Georgia’s Supsa and Russia’s Novorossiisk.

“A few years from now, a need for a new route will arise, and we are willing to offer help, providing normal conditions for the transit of additional amounts of Azerbaijani oil through the Odessa-Brody pipeline and its extension into Europe,” Yuriy Boiko told RIA Novosti in an interview.

He said some 37 million barrels of oil has been pumped through the Odessa-Brody pipeline this year and that 66.15 million barrels will be channeled into it next year.

“But we believe this pipeline’s main longer-term function will be to transit oil from the Caspian region into Europe, given that Russian oil already has enough pipeline capacities. We have already held negotiations with future partners in a consortium – Russia, Kazakhstan and a number of European companies – and we believe that Azerbaijan can offer a comprehensible model for additional transit capacities for itself.”

Boiko said the Ukrainian side has several versions of a business plan for the Odessa-Brody project, including one envisaging shipments to Europe, but that the issue of pumping oil along the proposed route will not be relevant until the existing transport capacities come to be filled to capacity.

Ukraine is also contemplating building an oil refinery for processing Azerbaijani oil, and may sell a chain of gasoline stations to Azerbaijan.

“The construction of a new plant, or the acquisition by the Azerbaijani side of one of our many existing facilities, for processing Caspian oil – Azerbaijani, Kazakh or Turkmen – is a normal process. We need to consider it from various points of view, and the Ukrainian government is willing to create comfortable business conditions,” Boiko said, adding that “the process should be mutually beneficial.”

Asked about the prospect of acquiring oil refineries and gasoline stations in Ukraine, the president of Azerbaijan’s National Oil Company, Rovnag Abdullayev, said, “We are working on this now; a feasibility study is being conducted and the Ukrainian market is being explored.”

Share this post