November 21, 2011 [The Kyiv Post] – Ukraine is ready to give Azerbaijan a 50% discount on port duties for vessels that enter the Pivdenny oil terminal (Odesa region) for freight transactions with Azerbaijani oil that will be transported through Ukraine.
Ukratransnafta and the State Oil Company of Azerbaijan or companies affiliated to it will agree on the volumes of oil for delivery, transport and transit with the Ukrainian oil pipeline system, the transport tariff, qualitative features and technical conditions.
Earlier Ukrainian Deputy Energy and Coal Minister Serhiy Chekh said the document states that Ukraine is willing to pump 16 million to 20 million tonnes of Azerbaijani oil through its territory, including 13 million to 17 million tonnes for transit.
The agreement envisages transportation of up to 3 million tonnes of Azerbaijani oil via internal routes to Drohobych Refinery Halychyna, Lviv region) and Nadvirniansky Refinery (Naftokhimik Prykarpattia, Ivano-Frankivsk region), as well as up to 5 million tonnes to the west (Hungary, Slovakia, the Czech Republic) and 8 million to 12 million tonnes to Belarus.
The explanatory note for the agreement says Azerbaijani oil could be transported to refineries in Poland via the Ukrainian, Belarusian and Polish branch of the Druzhba Pipeline (before completion of the Odesa-Brody-Plock Pipeline).
“Organizing oil supplies via the indicated routes will be particularly relevant in the context of Russia’s launch of the Baltic Pipeline System-2, which will redirect considerable volumes of transit oil from existing delivery routes,” the note says.
A bilateral agreement with Azerbaijan on oil transportation was signed in January 2011 during the World Economic Forum in Davos. Baku ratified the intergovernmental agreement in May.
Ukrtransnafta oil transportation volumes dropped 22.7% in 2010 to 29.8 million tonnes and oil transit fell 30.8% to 20.14 million tonnes.
