OREANDA-NEWS. November 26, 2010. JSC Ventspils nafta informs that it has received a statement from its subsidiary LatRosTrans regarding the repair works of oil pipeline. The statement published below. Ventspils nafta also informs that technical works have not been started yet and there have not been any related bargains.

A Safe and functioning pipeline infrastructure is key priority for LatRosTrans

To empty the pipeline belonging to LatRosTrans (LRT) and to carry out diagnostics and repair works is a normal industry procedure that is carried out in order to look after the pipeline and ensure its future usage. The removal of the technological oil that is currently within the pipeline can in no way be seen as a reason to suspend the oil transit business in Latvia.

The technological oil placed in the pipeline Polock-Ventspils and Polock-Mazeiki that runs through the territory of Latvia is the property of LRT and according to legislation is considered as belonging to the company since it ensures the safe operation and maintenance of the pipeline itself. Since 2003, when oil transit via pipeline was suspended in the direction to Ventspils, LRT has assumed financial liabilities and taken the responsibility for the maintenance of pipeline, integrity of the technological oil, while complying with environmental requirements, and has become the only infrastructure company paying engineering structure taxes for non functional pipeline.

The future development of the Latvian transit business is directly linked with integrating LRT with an international network of oil pipelines. Since 2002 the company has worked with significant financial losses due to the suspension of oil transit via pipeline and its maintenance costs. Total accumulated loss is around 45 million lats.

„If anybody really feels like worrying about the Latvian transit business, then instead of fretting about emptying the pipeline, which is a standard industry procedure, they should worry about the financial health of the only company in Latvia that can ensure oil transit via pipelines. I hope that no one in Latvia is interested in seeing the State losing an oil pipeline infrastructure due to a company’s insolvency,” comments Igors Stepanovs, LRT chairman of the board. „And lets be very clear” he added “this is an important development for Latvia. This oil belongs to LRT and it is perfectly legitimate for the owners of the oil to decide to remove it, to strengthen the integrity of the pipeline, improve financial health of the company, to retain skilled workers and focus on expanding real business in the current competitive transit business on the oil products pipeline.”

After removal of technological oil and cleaning, the pipeline will be filled with inert gas that is safer and is environmentally safer than crude oil. Keeping crude oil in an unused pipeline for years can increase risks of corrosion and potential ecological disaster, therefore it is even more important to substitute it with inert gas that is more suitable for conservation of the pipeline. After finishing the diagnostics and repair works, the pipeline will then be usable for transportation of crude oil and oil products, and if necessary even gas, providing citizens of Ventspils with access to this resource. The focus of LRT is to have a safe, operational infrastructure and putting it to active use.
In a challenging market operating environment, LRT is comitted to offering the best services to support Latvia’s key role in the oil transit business. In this vein, it should be noted that LRT is surpassing in November 2010 a volume of 5 million MT’s of gasoil throughput this year, which is an increase of 30% over the total volume handled in 2009. Furthermore, we hope to increase these volumes again in 2011.