Ukrtransnafta starts paying to BelOil in oil pumping dispute

JSC Ukrtransnafta, the operator of the Ukrainian oil transportation system, has started paying to CJSC Belarusian Oil Company (BelOil) in a dispute over oil pumping in 2011-2012 using the Yuzhny-Brody-Mozyr pipeline and paid $1.37 million to the Belarusian company, according to an annual report of Ukrtransnafta for 2018 posted on its website.

"In pursuance of the decision of the international arbitration court of the Belarusian Chamber of Commerce and Industry, taking into account the decision of the Supreme Court of Ukraine, the Belarusian Oil Company CJSC was paid $1.37 million," the company said in the report.

As reported, BelOil in 2011-2012 was supposed to supply at least 8 million tonnes of oil (4 million tonnes per year) of Azeri Light brand at Yuzhny oil terminal for subsequent pumping of this oil to the Mozyr refinery along the Yuzhny-Brody-Mozyr route in the "pump or pay" mode. Of the planned 4 million tonnes in 2011, only 0.9 million tonnes were delivered and pumped. At the same time, the contract of compensation for quality losses was additionally signed, as BelOil supplied Azeri Light to the Yuzhny terminal, while Urals oil was pumped via the oil pipeline to Mozyr, which is a cheaper grade of oil.

The international arbitration court of the Belarusian Chamber of Commerce and Industry on September 1, 2017 ruled to collect $7.857 million from Ukrtransnafta in favor of BelOil in the litigation over pumping of oil via the Yuzhny-Brody-Mozyr pipelines. The Supreme Court of Ukraine upheld the decision.