Lukoil hopes to restart operations at Odessa Oil Refinery this year
ST. PETERSBURG. June 16 (Interfax) - Lukoil (RTS :LKOH) oil company hopes to restart operations at Odessa Oil Refinery in 2011 with the injection of Urals blend oil, which will be supplied via the Yuzhnyi port, Lukoil's vice president, Valery Subbotin, told journalists on Thursday.
"We won't be working with Azeri Light [oil blend]," he said.
He said that Russian Prime Minister Vladimir Putin instructed Transneft three weeks ago to work on ensuring the supply of Urals blend to Yuzhnyi Port at a volume of 9 million tonnes annually.
Owing to the situation that has arisen on Ukraine's petroleum product market, as well as changes in oil supply, Odessa Oil Refinery halted operations in October 2010 owing to low operational efficiency. Also, at the start of 2010, the refinery stopped operating for a month and a half of repair-time. Total refining at the facility dropped by 29.4% in 2010 to 1.4 million tonnes.
At the start of October 2009, Lukoil halted production at the refinery since Ukrtransnafta stopped pumping oil via the Lisichansk-Kremenchug-Odessa Refinery pipeline. The latter company's proposed alternate supply routes to the refinery noticeably worsened the viability of supply to the Odessa facility. On November 1, 2009, Lukoil restarted supplying oil to the refinery via the Druzhba pipeline that crossing the Belarus-Ukrainian border and goes to Brody and Odessa. Lukoil chief Vagit Alekperov said that it would be necessary "to make a decision on the return of the previously existing technical chain for supplying oil from Russia via Lisichansk to the Odessa Oil Refinery".
At the start of April, the Ukrainian government and the owners of domestic refineries signed a supplement to a memorandum spelling out total oil refinement at these facilities. For instance, total processing at the Odessa Oil Refinery should come to 1 million tonnes of oil with light petroleum product output at 500,000 tonnes. However, the Odessa facility did not confirm total refining operations. Following the signing of the aforementioned document, Alekperov said that he considered the launch of Odessa Oil Refinery would be unlikely without renewed supply of oil via pipelines.
Refinery owners in Ukraine now insist on introducing protective duties on petroleum production in order to exclude dumped supply from other countries such as Belarus.