Azeri oil may flow to Plock in Poland by 2015 - Sarmatia

08 August 2011 17:51  [Source: ICIS news]

LONDON (ICIS)--The Sarmatia International Pipeline Company has set a timetable for a new pipeline extension that could enable Azeri oil to flow to a terminus at Poland's main refining and petrochemicals complex, the firm said on Monday.

An environmental impact assessment on extending the EuroAsian Oil Transport Corridor, from Brody in western Ukraine to Plock, the town in central Poland that is home to the complex owned by PKN Orlen, should be completed by the end of 2012, Sarmatia said.

Construction of the zlotych (Zl) 1.6bn ($567m, €395m) link could be completed by 2015, it added.

A further extension of the pipeline to Gdansk on the Baltic coast, where Poland's second-largest refining centre is located, is under consideration, Sarmatia added.

The EuroAsian Oil Transport Corridor currently brings Azeri oil collected at Odessa, on the Ukrainian Black Sea coast, to Brody and Ukraine.

Investment bank Wood & Company said potential additional joint-venture investors in the new Polish link, such as Orlen, should be wary of committing capital to the project because “Russian crude supply is likely to continue to be the most advantageous supply for the Polish refineries, from both a technical [configuration] and a cost point of view”.

“Even in the case of a potential disruption of the main supply route [from Russia], the Druzhba pipeline, it may be more economic to source an alternative supply from the Baltic coast than from the Black Sea,” it added.

($1 = Zl 2.82, €1 = Zl 4.05)

By: Will Conroy
+44 20 8652 3214

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