Ukraine and Iran discuss oil deliveries to Europe

Ukraine proposed to Iran to deliver oil and gas to Europe via the former Soviet republic at a meeting of Iranian Oil Minister Bijan Namdar-Zanganeh with a Ukrainian-Iranian experts group in the oil and gas sphere in Kiev earlier, according to Alexander Todiychuk, director general of JSC Ukrtransnafta.
“I was in the meeting with the minister and experts in this field and we discussed without protocol general issues about oil and gas policy in the Caspian region and the future of the EU energy corridor,” he said.

“We asked the Iranians if they want to develop this business together and what routes do they envision but we understand we are going to have an answer after the government changes. It will probably be in September or October,” he said, explaining that Iran’s president elect would choose his cabinet ministers in the first half of August.
“We are interested to see what the strategy of the new government will be and its vision in connection with the European Union. Ukraine is between these two big players,” Todiychuk said laughing.

The Ukrtransnafta director general said a possible deal with Iran will not complicate Ukraine’s business ties with the United States.
“We don’t want to prepare any competition. Our discussion is very open without any secrets from our partners and it is very interesting for us and for our American partners to see in which direction this country (Iran) will develop in the future,” Todiychuk said.

Iran, which is the world’s fourth largest producer of crude oil, would help secure supplies for a Ukrainian-led pipeline project to bring oil to Europe. Ukraine is pinning hopes for obtaining alternate sources to Russian oil on a recently-built tanker terminal on the Black Sea shore, and a pipeline running to the Polish border and the European oil transportation system.
The $ 200-mm Odessa-Brody pipeline was completed in 2003 but has yet to obtain customers.

Ukraine’s previous government had authorised the reverse use of the pipeline to carry Russia oil to Odessa. A number of contracts with international oil companies to carry oil to Europe were frozen. But the Orange Revolution reoriented the direction of Ukrainian policy toward the West.
The European Union recently unleashed financing for a feasibility study to extend the pipeline to Plock in Poland to carry Caspian oil to Europe. In what could be seen as a sign of things to come for the direction of the Odessa-Brody pipeline, Todiychuk returned to his position as director general of Ukrtransnafta on June 5, 2005, replacing Stanislav Danilenko. Todiychuk had opposed the idea of pumping Russian oil through the Odessa-Brody pipeline to Odessa and had been forced to resign on May 19, 2004.

“The priority is to use Odessa-Brody in its direct mode to Europe,” Todiychuk said. “I have been back a little more than one month in my position as director general of Ukrtransnafta and my main task is to renovate these agreements and contracts and terminate our position with the Russian company and startto operate pipeline in right direction,” Todiychuk said.
He stressed that the European Union has a specific interest in the extensive oil reserves of the Caspian Basin which will, in the future, contribute to security of supply in Europe. Todiychuk noted, however, that Ukrtransnafta is seeking “to develop some compromise with Russian companies.”