LUKoil may be forced to halt its Odessa refinery if it is unable to find crude volumes to replace those cut off by Ukraine’s plan to import oil through the Black Sea port in October.
Ukraine’s plans to ease its dependence on Russian crude oil supplies may also result in the stoppage of Urals exports from the Odessa port, industry sources said Thursday.
Market sources said crude deliveries to the Odessa refinery, operated by LUKoil, were halted on Oct. 1, as Ukrainian state pipeline operator Ukrtransnafta refused to supply crude to the refinery via the Kremenchug-Odessa pipeline.
Ukrtransnafta plans to deliver light seaborne crude to the Kremenchug refinery, Ukraine’s largest, from the port of Odessa in reverse mode in October, sources said. The first of two cargoes of light crude, most likely Azeri Light, will arrive in Odessa on Oct. 2 or 3. The second may follow on Oct. 6, the sources said Thursday.
“No final decision has been taken on the stoppage of the Odessa refinery,” LUKoil spokesman Dmitry Dolgov said. “There’s enough crude in storage to last us a few days, so we have one or two days to find a solution.”
“Alternative supply routes will complicate the refining economics,” he said.
Crude supplies to Odessa via the Brody-Odessa pipeline will increase the pipeline tariff by $6 per ton, Dolgov and the industry sources said.
Supply volumes via the Brody-Odessa pipeline are also limited by a lack of enough spare capacity at the Unecha-Mozyr section of the Druzhba trunk pipeline.
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