Eastern and western oil routes to be connected in Bratislava.

(From The Slovak Spectator)

Byline: Marta Iurianova Spectator staff

AN OIL pipeline network will connect Slovakia and Austria by 2006. The Russian oil producer Yukos and the Austrian company OMV recently signed a memorandum of understanding on transporting crude oil supplies from Siberian oil fields to the biggest Austrian refinery, owned by OMV, in Schwechat, near Vienna. A new pipeline, which will span from the Slovak refinery Slovnaft in Bratislava to Schwechat, will carry out the oil deliveries. The new pipeline project looks as if it will benefit all three parties. OMV, which buys crude oil mainly from the Middle East and the North Sea regions, will thus be able to diversify its oil supplies. The issue of diversifying oil delivery sources has become very appealing to oil processing companies since September 11. Yukos will extend its portfolio of customers in a more western direction. Yukos raises its oil production every year, but its sale possibilities on international markets are limited because of oil shipment problems from the distant Siberian oil fields. Last but not least, Slovakia will be able to transport more crude oil through its pipeline system, today used at less than half of its capacity; of course, this will be reflected in increased transfer fees. "When implemented, this large-scale project will enable our partners to significantly diversify their crude shipments, and it will allow Yukos to increase export to the promising European market," said Mikhail Brudno, an acting member of the Yukos management committee. Gerhard Roiss, the deputy chairman of OMV's executive board, said: "The cooperation will bring OMV cost advantages on both the product and logistics sides." Stefan Czucz, general director of Slovak oil transportation company Transpetrol, added: "Our main goal is to fully use the capacity of our pipeline system. "Constructing and operating the pipeline to Schwechat is an extraordinarily healthy and meaningful project that will enable us to increase the volume of transported oil and to approach the goals that we have set with our strategic partner [Yukos]." Building the new pipeline connection does not only mean tying up two European refineries; it also unites two different eastern and western pipeline systems that were built during decades past. The Druzhba pipeline transports Russian crude oil, mainly from Siberia, to Slovakia and the Czech Republic. On its way, it crosses Ukraine and Belarus. The section of the Druzhba on Slovak territory is operated by Transpetrol, of which Yukos owns a 49 percent share. The western pipeline system primarily ships crude oil from the Middle East and the North Sea. The oil is delivered to Adriatic and North Sea ports and then, through the pipeline network, supplies Croatia, Austria, Germany, Italy, and the rest of western Europe. There are only 60 kilometres between the pipeline networks of Bratislava and Schwechat. Thus, connecting these two pipelines was the simplest solution for enabling OMV to use Siberian oil. The length of the future pipeline will be approximately 60 kilometres, of which 10 kilometres will pass through Slovak territory. The pipeline should be completed by the end of 2005, with crude oil shipments ...