President, Moscow Center for Public Law Studies
Many observers, speaking of the May 2005 commissioning of the Baku - Tbilisi - Ceyhan (BTC) pipeline, referred to it as a blow against Russian interests, meaning that the new route "bypassing Russia" may be used for transportation of a major part of oil produced in the Caspian region, thus making Russian pipelines "unnecessary". To a certain extent, this is already taking place, as Azerbaijan leaders refused to use the Baku - Novorossiisk pipeline. If Kazakhstan follows the lead of Azerbaijan, refusing to transport its oil via Russia, Russia's losses will be even more tangible. This may be the result of utilization of the Odessa - Brody pipeline, built in 2001.
Ukraine has built the Odessa - Brody pipeline at its own expense, without international investor participation, without
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even having concrete obligations from oil companies as to filling the pipe. It appeared to be an economic gamble (costing about half a billion dollars), for it is as yet a single operating pipeline leading from south to north. Oil usually comes to Europe via east-to-west pipelines. This is why the new Ukrainian pipeline stayed idle until in the autumn of 2004 Kiev accepted the TNK-BP company's proposal about using it for transportation of Russian oil in the reverse direction, towards Odessa.
At present, the 674-km long Odessa - Brody pipeline has an annual throughput capacity of 9 to 14.5 million tons that can be used to transport oil to Western Europe. The Yuzhny oil terminal located in the port of the same name next to Odessa is an important integral element of its infrastructure. It is believed in Kiev that the throughput capacity of the pipeline may be expanded to 40 million tons per year, making it part of the so called "Eurasian oil transport corridor", which has been specially designed to route Caspian oil "around Russia". Oil is supposed to pass through Ukraine to Poland, and further on to Germany. Warsaw has already expr ...
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