The new route of Kazakh oil transportation through Poland has turned out to be more economic that through Ukraine. Astana. February 18. Interfax-Kazakhstan - The new route of Kazakh oil transportation through Poland has turned out to be more economic that through Ukraine, said Kairgeldy Kabyldin, the head of Kazakh National Company KazMunayGas.

"We turned to our Russian colleagues for help and they offered us a route that has turned out to be more economic than through Odessa," he told a Thursday press conference in Astana.

According to him, as much as 3.5 million tons of Kazakh oil was re-routed to Gdansk.

As reported, at the end of 2009 OJSC UkrTransNafta officially notified JSC KazTransOil of its intent to terminate the agreement on Kazakh oil transit through Ukraine starting January 26, 2010 without giving reasons behind the decision. KazTransOil reminded that UkrTransNafta had done so in spite of the cooperation agreement on Kazakh oil delivery to and transit through Ukraine, which the Kazakh and Ukrainian governments had concluded on June 1, 2004 and which was still in force.

KazTransOil repeatedly asked UkrTransNafta to revise the decision or conclude a new agreement on Kazakh oil transportation through Ukraine. However, the Ukrainian company did not offer a new agreement. As a result, KazTransOil became unable to deliver oil through Ukraine to Slovakia (Budkovec) in February and had to find another route to export the Kazakh oil. KazTransOil reached agreement with Russia to deliver oil to Poland (Gdansk) instead.

On February 11 Ukrainian Minister of Fuel and Energy Yury Prodan told journalists in Kyiv that OJSC UkrTransNafta, a monopolist on the Ukrainian market of oil transportation, was going to raise the tariffs on Kazakh oil transit through Ukraine by the southern branch of the Druzhba pipeline. "We are in talks about the new transportation tariff. If we reach agreement we will seal a contract as required," he said.

According to the minister, the Ukrainian side would like to have a certain pricing policy in place and, of course, more revenues for the national company (UkrTransNafta - Interfax-Kazakhstan).

KazTransOil, part of National Company KazMunayGas, is a natural monopolist on the Kazakh oil transportation market.

UkrTransNafta is an operator of the Ukraine's oil transportation system. The company is wholly owned by National Joint Stock Company Naftogaz of Ukraine.