VILNIUS, Oct. 10 – Azerbaijan, Georgia and Lithuania on Wednesday joined Sarmatia, a Polish-Ukrainian consortium aimed at building an oil pipeline link to enable supplies of Caspian Sea crude to reach markets in the European Union.
The link is supposed to hook up Ukraine’s Odessa-Brody oil pipeline with a pipeline in Poland near Plock that moves crude to an oil refinery and oil terminal in Gdansk.
The project underscores efforts by a number of countries seeking to reduce dependence on Russian oil imports apparently amid allegations that Moscow has been using its energy leverage for political pressure.
“A historic step has been made today as the project of delivering [Caspian] crude to Europe shifted from political level to practical level,” President Viktor Yushchenko said at a press conference in Vilnius.
Yushchenko joined presidents of Lithuania, Azerbaijan, Poland and Georgia for a summit aimed at increasing energy security in the region by promoting a project of alternative to Russia’s oil supplies.
Ukraine and Poland have been discussing the project for more than seven years, but it has been delayed due to technical, financial and political reasons.
Now the joining of Azerbaijan, an oil-rich country, and Lithuania, an important consumer of oil, and Georgia, a key transit nation, open a new level of political support for the project.
“We never concealed the fact that the completion of Odessa-Brody-Gdansk route for moving Caspian oil to the European Union is our strategic project,” Yushchenko said. “This is also the strategy for Kazakhstan, Azerbaijan, Georgia, Lithuania and many other our partners.”
The construction of the 250-km link between Brody and Plock in Poland is expected to cost $400 million and the parties are studying the possibility of getting financing from the European Union for the project.
The project anticipates sending crude from Azerbaijan via Georgia and then by oil tankers to Ukraine’s Pivdenniy oil terminal near Odessa and then via Odessa-Brody pipeline to Polish Plock and Gdansk. The Caspian oil can also be shipped from Kazakhstan via an oil terminal in Novorossiisk of Russia.
Pivdenniy is capable of handling 9 million metric tons of crude oil, while Odessa-Brody is capable of sending 12.5 million metric tons of crude annually.
Ilkham Aliyev, the president of Azerbaijan, said: “Sarmatia’s goal is to build a solid basis for transporting energy resources through Georgia and Ukraine to Europe.”
The summit in Vilnius is the second such meeting of regional leaders seeking ways of diversifying their crude oil supplies. The same countries joined a summit in Poland in May.
The next energy summit will be held in Kiev next year “to draft a roadmap for construction of the pipeline link and its financing,” according to Yushchenko. (jp/ez)