Ukraine Offeres Belarus to Replace Oil Directly on "Druzhba"

19.11.2010 15:33

While discussing the test oil pumping to Mazyr refinery through Odessa-Brody pipeline, Ukraine offered Belarus to replace Venezuelan oil of Santa Barbara grade to the Russian Urals directly on "Druzhba" pipeline. According to experts, this will reduce the cost of raw materials shipping to Belarus in 2.5 dollars per barrel in comparison with direct pipeline routes from Russia.

Earlier a tanker with 80 tons of Russian oil arrived at Yuzhni port (Odessa region) from Novorossiysk. This oil had been acquired by Belarus under the scheme of Venezuelan oil substitution by an international trader Glencore (a major oil and gas trader in Europe and the United States, owning Russian Aluminum and oil company Russneft shares). The ship was due to have been unloaded on Thursday, but it was delayed due to the fog.

«I have no doubt that Glencore could participate (in deliveries to Belarus),» a trader said, noting that it is worth waiting for Urals unloading in Yuzhni, Reuters reports.

On Wednesday, November 17, industry sources said that Glencore could provide the second November tanker to Yuzhni port by the same route, but this information has not yet been confirmed.

Traders also believe that Belarus has managed to achieve the oil transportation cost reduction by the Ukrainian side in Yuzhni port. «The Belarusian delegation has been staying in Kiev for a week and has allegedly agreed on discounts,» a trader said.

According to another source, the Ukrainian side offered to go further without the supply of oil marine lots, replacing them with a swap deal for Urals on «Druzhba» oil pipeline. In this case, Glencore would have received Venezuelan oil from PDVSA, instead of providing Urals pipeline volumes, supplied to Belarus from Russia, as before, by pipeline.

«Why should the port be used when one can replace here (an offshoot of «Druzhba» to Mazyr refinery)?» the source said. According to him, Ukraine still intends to use Odessa-Brody pipeline for light grades of raw materials and would not like to load it with moderate Urals on an ongoing basis.