Druzhba Problems

abarrelfullabarrelfull wrote on 29 Dec 2009 07:51

The perhaps not aptly named Friendship pipeline has been in the news for all the wrong reasons.

The pipeline is one of the world's biggest and is very significant for the EU's eastern and central members.

It has a capacity of over 2 million barrels per day (bpd), of which some 1.2 million bpd went directly to consumers in the European Union in 2008.

It passes through Ukraine, and after Ukraine demanded a higher transit fee, the Russians had threatened to stop the flow. However it seems that the crisis is over before it began.

Ukraine and Russia resolved a dispute over oil shipment tariffs Monday, ensuring there would be no disruption in supplies to Eastern Europe over the New Year holiday, the Russian Energy Ministry said, according to a news agency. The preliminary agreement over transit prices will be finalized and signed "within days," ministry spokeswoman Irina Esipova told the ITAR Tass news agency, without giving details of the new deal.

The problem with pipelines is that they are so inflexible, and subject to the whims of more than one government. Given Russia's bullying of Ukraine, one can understand their wish to extract maximum advantage from their transit status. However, given Ukraine's lack of reliability, one can understand Russia's wish to send more of this oil through alternative routes.

The wiki page: Druzhba Pipeline

