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Poland postpones Brody-Plock oil pipeline with Ukraine

7 Oct 2013

Poland has changed the status of the oil pipeline project Brody-Plock from "main" to "reserve" project. The project, which consists in the extension of the existing Odessa-Brody pipeline in Ukraine to Płock and to Gdansk in Poland, is developed by a joint venture created in 2004, Sarmatia, grouping together Socar (Azerbaijan), GOGC (Georgian Oil and Gas Company), PERN and Ukrtransnafta (Ukraine) with 24.75% each- and Klaipedos Nafta (Lithuania, with 1%). Substantial delays in the administrative process (2-year delay for the environmental authorisation) are threatening the development of the project, whose cost is estimated at €455m. The EU allocated the funds to Poland for realising the project but funds can be used only on condition that the pipeline construction is completed by the end of 2015; this would mean that all authorisations are granted and that construction starts by the end of 2013. The feasibility study was completed in March 2012 but pre-commissioning is not expected to be completed before 2017. Consequently, Poland decided to renounce to EU funds and to "downgrade" the project from 'main" to "reserve" project.

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