Eurasian Integration Yearbook 2012

Natalia Maqsimchook. “Chronicle of EurasianRegional Integration 2011”2011: Data and ReviewsUkraine ready to help LUKOIL in launching Odessa RefineryJuly 18, 2011Ukrainian authorities are ready to help Russian oil major LUKOIL re-launch theOdessa Refinery, which has been idle for nine months. Ukraine’s First DeputyPrime Minister Andrei Klyuyev instructed the Ministry of Energy and the CoalIndustry to hold talks with the management of LUKOIL on launching the refineryoperations.Note:Due to current conditions in the Ukrainian market for petroleum products it has become uneconomic to operatethe Odessa refinery. LUKOIL has therefore decided to shift the scheduled maintenance at the refinery from thefirst quarter of 2011 to the fourth quarter of 2010. Oil refining in Ukraine is uneconomic because Ukraineimports large amounts of oil products from Belarus at dumping prices. Kremenchug and Lisichansk refineriesare also making losses due to Belarusian imports. Furthermore the Odessa refinery lost its main oil supply routeafter the Odessa-Brody pipeline switched to transporting Azeri oil to Belarus.Russian-Ukrainian gas conflict nearing resolutionSeptember 27, 2011RBK dailyThe gas conflict between Russia and Ukraine reached its height in late summer2011. On September 1, Ukraine’s Energy Minister announced that from 2012Ukraine intends to drastically curtail Russian gas purchases to 27 billion m 3(compared to a planned purchases of 41.6 billion m 3 2011) and to submitan appeal to the Court of Arbitration in Stockholm to have the gas contractamended.On September 2, Ukraine resumed negotiations with Gazprom on curtailinggas deliveries. In addition, Kyiv proposed amending gas transit terms for 2012.By September 5 relations between the two countries had deteriorated further. Iftalks over the current gas contract fail, it is very likely that Ukraine will liquidateits national energy company Naftogaz, which will force a review of gas contractsbetween Russia and Ukraine.On September 17, the Ukrainian authorities expressed their readiness to makeconcessions on Russian gas supplies in the context of Gazprom’s legally bindingagreement with its partners to build the South Stream pipeline, which bypassesUkraine. On September 26, Yanukovich visited Moscow to discuss the possibleestablishment of a gas consortium, and finally the parties reached a truce.Following talks between the Presidents of Russia and Ukraine, also attended byRussian Prime Minister Vladimir Putin, Russia dropped its insistence on Ukraineacceding to the CU and was prepared to discuss a trilateral gas consortium withthe EU on the basis of Ukraine’s gas transportation system. On September 27,Eurasian Development Bank267