Pipeline’s days numbered

RIGA - Latvia is at risk of losing the oil pipeline running through the country to the port of Ventspils, along with even any theoretical possibility of ever renewing oil transit through the country, reports the business daily Dienas Bizness. The pipeline’s owner, LatRosTrans, has begun pumping out the technological oil that was left in the pipeline when it was shut down in 2003, and this small amount will most likely be sold on the world market. However, without this oil, the pipeline will soon become unsuitable for transit, and will become a pipe suited only for scrap metal.

Although the pipeline has until now been kept in a state of readiness to recommence oil transit operations, in the interests of quick profits, the very structure itself is at risk of being dismantled. Moreover, according to Dienas Bizness, the construction of a new pipeline could cost more than 310.2 million lats (442.8 million euros), as well as requiring problematic permits not only in Latvia, but also from Lithuanian authorities.

Experts who spoke to the newspaper expressed the opinion that it would be much more beneficial to the state to keep the pipeline in a state of readiness, and that in the future it could recommence operations, providing jobs and tax income.
Even better would be to get the pipeline carrying oil again. The pipeline has been sitting idle for years now costing the state in substantial lost tax revenue. The Latvian government needs to solve the problem, by ensuring the owners properly operate and maintain it, including environmental considerations, with proper state regulation, and get the oil flowing again.

But at the moment, the driving force seems to be in the private investors’ interests, and this means selling the oil remaining in the pipeline in order to make an immediate profit.

Another theory proposes that this is a tactic to ‘fence in’ Belarus, which has recently been exploring options for increasing oil imports from countries other than Russia. However, it is also possible that the Russian authorities may not even know of these developments, which would rule out any possibility of increasing their influence through Ventspils oil transit.
Transport Minister Uldis Augulis (Union of Greens and Farmers) stressed that he currently has no information on this matter, and is therefore unable to comment. The minister noted that he has been in office now for only one week, and has not been able to familiarize himself with all of the current issues in the transport sphere.