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UPDATE 1-Ukraine oil import plan hits Russia-owned refinery

Published 10/01/2009, 11:10 AM
Updated 10/01/2009, 11:18 AM
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* LUKOIL says has 1-2 days to find solution

* First Odessa import cargoes due in early Oct

* Urals supplies declined via Kremenchug-Odessa pipeline

(Adds details)

By Gleb Gorodyankin and Pavel Polityuk

MOSCOW/KIEV, Oct 1 (Reuters) - Russia's LUKOIL may be forced to halt its Odessa refinery in Ukraine 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 on Thursday.

Market sources said crude deliveries to the Odessa refinery, operated by Russia's 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 told Reuters.

The first of two cargoes of light crude, most likely Azeri Light, will arrive in Odessa on Oct. 2-3. The second may follow on Oct. 6, the sources said on 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."

He added: "Alternative supply routes will complicate the refining economics."

Crude supplies to Odessa via the Brody-Odessa pipeline will increase the pipeline tariff by $6.0 per tonne, 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.

Crude supplies to the Odessa refinery may result in a reduction of deliveries to other consumers via Druzhba, traders said.

Russia stopped crude supplies to Kremenchug in 2007 after a dispute over the refinery, when the plant's former manager used police to oust managers friendly to Russia's Tatneft, citing a court order to reinstate him.

The refinery's owners have been using mostly domestic crude to supply the refinery after the dispute. (Editing by Sue Thomas)

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