- The Washington Times - Wednesday, December 26, 2001

PIVDENNYI, Ukraine A new oil terminal that opened here last week is expected to lessen Ukraine's dependence on Russian energy resources and boost its role as a transit point for Caspian Sea oil bound for European markets.
"This is a project that has a huge effect for our nation and its politics," Prime Minister Anatoliy Kinah said in an interview. "Ukraine is doing all it can to lower its dependency on [foreign] resources."
Conceived in 1992, the new terminal and pipeline are the first stage of a project that will allow Ukraine to eventually refine and transport 100 million tons of oil each year from the former Soviet republics to Central and Eastern Europe.
The 306-mile-long pipeline, which ends at Brody in northwestern Ukraine, would connect to another proposed pipeline running on from Brody to Plotsk, Poland the site of an important refinery and the Baltic Sea city of Gdansk, Poland, where the oil could be put on ships headed for other Western markets.
The project also foresees oil being transferred to the existing Druzhba pipeline, which runs from Russia across Belarus and Poland.
The new Black Sea terminal initially will handle 9 million tons of oil a year and eventually will be able to pump 45 million tons annually.
One of the major advantages of the project is that it will allow oil exporters to avoid traffic jams in the crowded Bosporus Strait linking the Black and Mediterranean seas.
It also will provide an alternative transit route for Caspian Sea oil. Although the region's known oil reserves are only a fraction of the world's total, the region in time will become a significant competitor to the Middle East.
Since the 1991 breakup of the Soviet Union, countries in the Caspian region, particularly Kazakhstan, have been looking for oil export channels that avoid the existing routes though Russia, which has used its control of energy to bring political pressure on its neighbors.
"When you look at the energy situation in the last 10 years, countries of the former Soviet Union want to get away from their dependency on Russia, so they are looking for new channels to transport," said Oleksander Moskalets, an analyst with Strategy One, a Kiev-based consulting firm that is advising Ukrtransnafta, the Ukrainian company in charge of the project.
Michael Bleyzer, president of SigmaBleyzer, a Houston-based company advising the Ukrainian government, said the Odessa-Brody pipeline is realistically the only viable way around the Bosporus.
"It's the only one that is in existence today," he said. "It's a very viable pipeline."

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