Brief project description
The Brody – Adamowo oil pipeline project envisages the construction of the pipeline, which will connect the Main Oil Transfer Pumping Station “Brody” (the end point of the existing Odessa – Brody oil pipeline in Ukraine) with the oil tank farm in Adamowo (the connection point to northern line of Druzhba pipeline system). It is an integral part of the Euro-Asian Oil Transportation Corridor (EAOTC), by which the Caspian and Central Asian crude oil will be delivered to customers in Poland and other European countries. The corridor starts in Azerbaijan, runs through the territory of Georgia, Black Sea, Ukraine and Poland, and creates opportunities for transporting crude oil to Slovakia, Czech Republic, Poland, Germany, and through Sea Oil Terminal Gdansk – to the recipients in Baltic countries. The Brody – Adamowo Oil Pipeline also creates the possibility to transport the crude oil in reverse mode – from Baltic Sea to the consumers in Ukraine, Slovak and Czech Republic.The Project envisages the construction of the following infrastructure:
• Pipeline between the Main Oil Transfer Pumping Station “Brody” (Ukraine) and oil tank farm in Adamowo (Poland). Its total length is 397,9 km (270,5 km in Poland + 127,4 km in Ukraine). Diameter of the pipe is 710 mm (28”). Initial capacity - 10 MTA.
• One main pump station (in Brody).
• Control system SCADA with optical fiber cable along the pipeline
• 29 block valve stations (6 on the Ukrainian side and 23 on Polish side).
The main objective of the project is to improve the energy security of the European Union member states, including Poland, by diversifying oil supply routes and sources. This objective assumes that it will be possible to supply at the first stage up to 10 million tons of oil annually (MTA) from the Caspian Sea and Central Asia regions to the mentioned countries. In an emergency, it will be technically possible to send the entire volume of 10 MTA of Caspian and Central Asian oil to those customers in the Member States to which oil supplies from traditional directions will be impossible or reduced considerably due to a failure or other reason. The delivery of Caspian and Central Asian crude oil through the Adamowo – Brody pipeline will increase the security of oil transportation to the countries along the route. It will enhance the diversification of supply routes to the EU and Poland by not relying heavily on receiving crude from a single source in the world. Such connections would result in a high level of interoperability of the regional oil pipeline network, thus ensuring continuous oil flows to the depending refineries in case of a supply disruption in the conventional supply route.
The project will provide for integration of Ukrainian oil transportation system with Polish and European ones increasing European Energy Solidarity and improves the economic ties between the EU and countries participating in the project. It will strengthen partnership with the producing partners and give way to better promote EU policies outside its borders. The project will also enhance, as underlined, the functioning of the internal European and Polish energy market by ensuring stable supplies and eliminating monopolistic price fixing. The Brody - Adamowo oil pipeline creates the possibility to transport the crude oil in reverse mode – from Baltic Sea to the consumers in Ukraine, Slovakia and the Czech Republic. It will enhance the interoperability of the European oil transportation system and allow to minimize the risks of the crude oil delivery interruption. The project contributes to protecting and improving the condition of the natural environment and health by avoiding shipping risks and emissions arising from tanker traffic which would be the transport alternative in case the Brody - Adamowo pipeline was not realized.
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Basic project data
Descriptions |
Poland |
Ukraine |
Project promoter company/Organization full name |
MPR "Sarmatia" sp. z o.o.
|
JSC "Ukrtransnafta" |
Shareholders of the project promoter company
|
SOCAR (Azerbaijan ), GOGC (Georgia), JSC "Ukrtransnafta" (Ukraine), PERN S.A. (Poland), AB "Klaipedos Nafta" (Lithuania) |
SOCAR (Azerbaijan ), GOGC (Georgia), JSC "Ukrtransnafta" (Ukraine), PERN S.A. (Poland), AB "Klaipedos Nafta" (Lithuania) |
Project name
|
Ukraine - Poland oil pipeline (Brody - Adamowo)
|
Ukraine - Poland oil pipeline (Brody - Adamowo) |
Project PECI or PMI
|
PECI |
PECI |
Project Code on the current (2020) PECI/PMI list
|
Oil_01 |
Oil_01 |
Project Name on the current (2020) PECI/PMI list
|
yes |
yes |
Project Code on the current (2019) EU PCI list |
9.1 |
9.1 |
Project Name on the current (2019) EU PCI list |
Adamowo — Brody pipeline: pipeline connecting the JSC Uktransnafta's handling site in Brody (Ukraine) and Adamowo Tank Farm (Poland) |
Adamowo — Brody pipeline: pipeline connecting the JSC Uktransnafta's handling site in Brody (Ukraine) and Adamowo Tank Farm (Poland) |
Project final investment decision status |
Non-FID |
Non-FID |
Project Name in National NDP /Infrastructure Plan |
Brody - Adamowo pipeline (Part of the Euro-Asian Oil Transportation Corridor) |
Brody - Adamowo pipeline (Part of the Euro-Asian Oil Transportation Corridor) |
Project Code in National NDP /Infrastructure Plan |
3.1.1.3
|
2,5 |
National NDP / Infrastructure plan publication year |
2009 |
2017 |
National NDP/infrastructure plan publication website |
|
Energy Strategy of Ukraine for the period up to 2035 (2017)
|
Project website according to Article 9(7) of Regulation (EU) 347/2013 |
Brody-Adamowo oil pipeline section, “Sarmatia” sp. z o.o. website |
Brody-Adamowo oil pipeline section, “Sarmatia” sp. z o.o. website |
Name/website of the designated competent authority in the country |
Ministry of Climate and Environment |
Ministry of Energy and Coal Industry of Ukraine |
Address of the designated competent authority in the country |
36 Krucza St./6 Wspolna St., 00-522 Warsaw, Poland
|
30, Khreshchatyk str., Kyiv, Ukraine 01601 |
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Project details - technical information
Start point in country (Town/Interconnection Point)
|
Poland section |
Poland - Ukraine state boarder, DN 710 mm (28"), length - 270,5 km |
Ukraine section |
From The PSC Uktransnafta’s handling site in Brody (50.066809, 25.121397 - the end point of the existing Odessa – Brody oil pipeline), Ukraine - DN 710 mm (28"), length - 127,4 km
|
End point in country (Town/Interconnection Point) |
Poland section |
The Adamowo tank farm (52.361369, 23.133574 the connection point to Przyjazn oil pipeline, northern line of Druzba system), Poland |
Ukraine section
|
Ukraine - Poland state boarder |
Pipeline capacity at border point |
Poland |
Ukraine |
X --> Exit (bbl/d) |
650.621
|
650.621 |
X<-- Entry (bbl/d) |
650.621 |
650.621
|
Pumping station location and capacity |
Poland |
Ukraine |
Name of the Pumping station |
Construction of a pumping station is not planned at the first stage |
Main Oil Transfer Pumping Station “Brody”, 1.2 MW |
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Project Implementation Plan Article 5(1)
Project Pre-feasibility Assessment |
Poland |
Ukraine |
Start: 2008, March |
End: 2009, April |
Start: 2008, March |
End: 2009, April |
Details - Explanation |
The pre feasibility study of the Euro-Asian Oil Transportation Corridor Project was prepared in 2009 by Granherne. It also covered the construction of the Brody – Adamowo pipeline as a part of the mentioned corridor. |
Percentage Done (%) |
100% |
Feasibility Assessment, ESIA/EIA and Design Studies |
Poland |
Ukraine |
Start: 2010, April |
End: 2018, April |
Start: 2010, April |
End: 2018, April |
Details - Explanation |
The first Feasibility Study of the Brody – Adamowo pipeline project was prepared in December 2010. At those moment the project was on the list of priority projects of Operational Program “Infrastructure and Environment” (OPIE), Priority X Energy security, including diversification of energy sources. The amount of EUR 120 mln was allocated to it as a grant financing. Due to a long OPIE procedure, the Feasibility Study was updated on March 2013.
At the end of 2013 the Polish Government decided to move the Brody – Adamowo oil pipeline project from the main list of the OPIE to the reserve one. The financial grant previously reserved for the project was transferred for the implementation of other infrastructural projects.
Due to significant changes of the financial conditions of the project, as well as significant changes of the global oil market, the decision to prepare the next update of the Feasibility Study was taken. The work on it started in April 2016. It was completed in April 2018. |
Percentage Done (%) |
100% |
FEED/Main Design |
Poland |
Ukraine |
Start: 2019, June |
End: 2023, June |
Start: 2022, June |
End: 2023, June |
Details - Explanation |
The FEED of the first section (valve station No.1) of the pipeline has been completed. |
has not started yet |
Percentage Done (%) |
10% |
0% |
Market Survey - Open Season/Capacity Auction |
Poland |
Ukraine |
Start: 2022, May |
End: 2023, April |
Start: 2022, May |
End: 2023, April |
Details - Explanation |
has not started yet |
has not started yet |
Percentage Done (%) |
0% |
0% |
Permitting |
Poland |
Ukraine |
Start: 2011, March |
End: 2023, October |
Start: 2011, March |
End: 2023, October |
Details - Explanation |
The Environmental permit was issued for the Project in October, 2013. During 2016-2017, the promoter obtained the necessary permits for changing the purpose of the land use through which the pipeline will run in 9 communes in Poland. These permits were needed to prepare the local development plans. At the next stage, the Promoter plans to obtain a construction permit. Before it, the FEED and land acquisition should be completed. In September 2019, a construction permit for the Brody – Adamowo pipeline first section (valve station No.1) was obtained. |
The Environmental permit was issued for the Project in October, 2013. At the stage of obtaining a construction permit, the Promoter will have to receive a final environmental permit in Ukraine. The issue of land acquisition for construction is regulated by the Law on Strategic Investments and does not require individual consent from each owner of the land plots. |
Percentage Done (%) |
70% |
30% |
Regulatory/Authority Approval of the project |
Poland |
Ukraine |
|
|
Details - Explanation |
This project does not require any approvals from regulatory authorities. The planning approval and permitting process was launched in March 2011. The Promoter plans to complete it no later than October 2023 by obtaining a Construction permit. |
Final Investment Decision taken |
Poland |
Ukraine |
2023, November |
2023, November |
Details - Explanation |
|
|
Tendering |
Poland |
Ukraine |
Start: 2022, November |
End: 2023, November |
Start: 2022, November |
End: 2023, November |
Details - Explanation |
|
Percentage Done (%) |
0% |
0% |
Construction |
Poland |
Ukraine |
Start: 2024, January |
End: 2025, August |
Start: 2024, January |
End: 2023, October |
Details - Explanation |
|
|
Commissioning |
Poland |
Ukraine |
2025, August |
2025, August |
Details - Explanation |
|
|
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Project Annual Report Article 5(4)
Project evolution since 2013 |
Poland |
Ukraine |
Project evolution since 2013 |
Delayed |
Delayed |
Evolution driver description |
Permit Granting
|
Permit Granting |
Explanation |
As a result of the non-constructive position of the Department of Agriculture, the Marshal's Office of the Lubelskie Voivodeship was granted a permit to change the purpose of the plots with a delay of two years. This led to a two-year delay in the process of incorporating the route of the future oil pipeline into local development plans in Poland. |
Problems arose in Poland
|
Mitigation measures to ensure project schedule |
The promoter strengthened cooperation with the local authorities of Poland to solve the problem. |
|
Project implementation actions conducted since 2016 |
Poland |
Ukraine |
Project development |
The pipeline route was introduced in the local development plans (LDP) of all 26 local communities (gminas). The feasibility study was updated in 2018. A new project schedule has been prepared. Preparatory work for the acquisition of land has begun. The validity of the Environmental Permit for the project was extended to 10 years until October 2023. In September 2019, a construction permit for the Brody – Adamowo pipeline first section (valve station No.1) was obtained. Full technical requirements and conditions for solving the problem of crossing the oil pipeline with the existing infrastructure were agreed for 11 out of 26 communities in Poland. |
Permit Granting |
The Environmental permit was issued for the Project in October, 2013. |
The Environmental permit was issued for the Project in October, 2013.
|
Consultation procedures |
Public consultations were launched in March 2011. They were successfully completed in February 2017. All protests and comments were considered and resolved. |
In accordance with the Ukrainian legislation the public consultation will be held at the stage of Construction Permit`s obtaining. |
Construction |
has not started yet |
has not started yet |
Commissioning |
has not started yet |
has not started yet |
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Project CAPEX and financing information
CAPEX Information (mEUR) |
Poland |
Ukraine |
2021 |
0,1
|
0
|
2022 |
2,5 |
1,1 |
2023
|
14,3 |
6,5 |
2024
|
106,7 |
48,8 |
2025 |
123,4 |
56,5 |
Project CAPEX SUM
|
359,9
|
Project CAPEX certainty (+/-%)
|
25% |
25% |
Has the project CAPEX estimate changed since PECI/PMI submission |
no |
no |
Financing Information |
Poland |
Ukraine |
Applied for IFI Financing (yes/no) |
no
|
no
|
Granted (yes/no) |
no |
no |
Which institution and in what is the amount (mEUR)
|
|
|
When |
|
|
Applied for Grants from IPA/NIF (yes/no) |
no |
no |
Granted (yes/no) |
no |
no |
When |
|
|
What is the amount (mEUR) |
|
|
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Additional project information
International Cooperation - International Agreement(s) signed |
Poland |
Ukraine |
When |
not yet |
not yet |
Signatories of the Agreement |
Governments of Azerbaijan, Georgia, Lithuania, Poland and Ukraine
|
Short description |
It is assumed that the Intergovernmental agreement on the support of the EAOTC and Brody - Adamowo project as a part of it will be signed by Azerbaijan, Georgia, Lithuania, Poland and Ukraine. |
Foreseen Regulatory Regime - Third Party Access |
Poland |
Ukraine |
Regulated Third Party Access |
Exempted from Third Party Access. There is no obligation to provide access to third parties. |
Negotiated Third Party Access |
Owners of crude oil transportation infrastructure has no obligation to introduce the TPA regime. But promoter plans to use the procedure similar to the negotiated TPA in the future. |
Exempted from Third Party Access capacity and duration (% of total and MW) |
100% |
Foreseen Tariff Regime |
The tariff for crude oil transportation by the Brody - Adamowo pipeline will be determined by the Promoter (Operator) in negotiations with customers. The necessity to return the investment costs will be taken into account. |
Barriers to Project Implementation |
Poland |
Ukraine |
Regulatory Framework |
no |
no |
Permit Granting |
yes: The construction of oil pipelines in Poland unlike the gas infrastructure or roads, is based on general laws, primarily on Construction act from July 17, 1994. According to this law Promoter has to sign easement agreements with owners of all parcel the pipeline road goes through. The signing of these agreements should be on amicable basis. The Brody – Adamowo pipeline route passes through more than 8,000 land parcels. The threat that at least one owner will refuse to sign an easement agreement is very high. In this case the investment process will be stopped. The risk that at least one owner will refuse to sign an easement is very high. In this case, the investment process will be stopped. An additional threat is land parcels with an uncertain legal status - for example, when the land parcel owner has died or is unknown. In February 2019, the Polish Parliament adopted a special law on the construction of crude oil infrastructure, which solves the aforementioned problems. But this law does not apply to the Brody-Adamowo oil pipeline project. It is necessary that this law be extended to the Brody-Adamowo pipeline project. |
no |
Financing |
yes: The EU budget for 2021 – 2027 does not envisage financing the infrastructural projects related to crude oil transportation. Thus, Brody – Adamowo can’t get granting or any other financial support from Connecting Europe Facilities, OPIE or other EU Structural Funds. Lack of financial support from EU makes the Project less stable and attractable for potential investors. |
Political |
yes: Economic and political instability in some participating countries may have a negative impact on the implementation of the Project. |
Market |
yes: The European Green Deal, which implies an almost complete rejection of the use of oil as an energy raw material negatively affects the prospects for the implementation of any oil transportation project. |
Which incentives would support the realization of the project |
The PECI/PMI/PCI oil transportation projects should have the same opportunity and rights to use the instruments of financial EU support, like gas and electricity projects. |
Final remarks, other |
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