Oil and Gas Pipeline Watch

The Czech Republic looks to alternative oil routes

The Czech Republic may seek alternative routes for oil shipments to the country through a German pipeline in order to ease on dependency on Russian fuel imports, officials said.

Russian oil and gas firm Tatneft told the Czech Republic it had decided to reduce oil shipments to the country in favor of more profitable markets in Turkey. Some observers say the decision came in response to a move by Prague to back a U.S. missile defense system in Eastern Europe, a claim Russia denies.

The state-owned Czech oil pipeline firm Mero issued a release stating it would offset any shortfalls through a pipeline from Ingolstadt to Kralupy and Litvinov, connecting to German resources, The Czech News Agency reported.

Mero is the only company transporting oil to the Czech Republic.

Russian Prime Minister Vladimir Putin said Monday, however, full oil shipments to the Czech Republic would resume, denying claims the move was related to the missile defense shield.

"I'm calling on you to treat this matter carefully and work out (all issues) with all the partners so that there are no interruptions" to Czech shipments, the Interfax news agency quoted Putin.

Israel to link pipelines to Turkey.

Israel could serve as an energy hub to transport oil from Azerbaijan and Russia using Turkish pipelines, sources said.

Turkish Energy and Natural Resources Minister Hilmi Guler said the two countries could complete analysis of a project to establish Israel as a transportation bridge within 10 months and finish construction by 2011, Trend Capital News reported.

Officials with the Israeli Eilat Ashkelon pipeline company approached their Turkish counterparts to discuss establishing a link to the Turkish port of Ceyhan.

Israel receives about 14 million barrels of its annual 84 million barrels of crude oil requirements from Azerbaijan.

The decision follows a June visit to the Azeri capital, Baku, by Israeli Minister of National Infrastructure Binyamin Ben-Eliezer, who said Israel could serve as a transit bridge to bring Azeri oil to Asian markets.

The natural resources will reach the Israeli port city of Ashkelon from Ceyhan in the Mediterranean Sea.

Odessa-Brody sparks Ukrainian row.

Ukrainian President Viktor Yushchenko is behind deals on the Odessa-Brody crude oil pipeline that will deplete national resources, the prime minister said.

Prime Minister Yulia Tymoshenko said contracts signed by offshore oil companies for the 419-mile Odessa-Brody pipeline are inconsistent with regional expansion projects and blamed the alleged misdirection on the Ukrainian president, the Interfax news agency said.

"Contracts that are being signed with offshore companies regarding the Odessa-Brody pipeline have nothing to do with international projects," Tymoshenko said. "This is yet another of the presidential secretariat's tricks."

Azerbaijan, Georgia, Lithuania, Poland and Ukraine recently moved to extend the Odessa-Brody line to the central Polish city of Plock to deliver Caspian oil to the region while avoiding Russian territory.

Tymoshenko said any attempts to move on offshore contracts for the pipeline will leave the country with "virtually nothing" and pledged to thwart the issue.

"The government is determined to fight possible corruption schemes involving oil supplies through the Odessa-Brody," she said.

Georgia explores pipeline expansions.

Georgia is exploring new pipeline projects to expand its transit capacity to bring natural resources to Western markets, the Georgian energy minister said.

Georgian Energy Minister Alexander Khetaguri said during a visit to Kazakhstan that the rise in the price of crude on the international market makes expansion a viable avenue for Tbilisi to diversify its energy sector, New Europe reported.

"With today's price for crude oil, the attractiveness and profitability of the BTC (Baku-Tbilisi-Ceyhan pipeline) and the Baku-Supsa (pipeline) are obvious. Therefore, with the growing production of hydrocarbons in Central Asia and in the Caspian region, new oil pipelines will undoubtedly be profitable," he said.

The minister said as Georgian markets become more liberalized, competition among various entities in Europe will make oil resources in the Caucasus more attractive.

"The law of the market is such that he who pays more for the oil will determine where it will go," Khetaguri said. "With the growing oil resources, the Caucasus direction will be increasingly used."

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