A Safe and functioning pipeline infrastructure is key

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.