A"BURIED" TREASURE: The state"s oil pipelines - between maintenance and ready for the scrapyard

• The Ministry of the Economy will draft a feasibility study following which it will decide on the whether the national network for transporting oil will be maintained or dismantled

After repeated price increases since the beginning of the year, the price of fuel is getting vertiginously close to the level of 6 lei/liter and could cause a domino of price increases for consumer goods.

Oil makers claim that, apart from the rise in the price of the oil barrel and the high level of taxes and excises charged by the state, the price of fuel at the pump is also influenced by the losses that they incur due to the precarious state of Romania"s infrastructure, which his slowing their shipments down.

Constantin Tampiza, the coordinator of the development strategy of the Russian oil group Lukoil in Romania, recently said: "Due to the bad road infrastructure in Romania, we have to replace our tanker trucks once every three years. Simply cutting our speed by 5 km/h - to avoid our trucks going off the road due to the terrible state that the roads are in - we lose 2-3 dollars per ton of fuel".

The authorities are surprised that the price of fuel is spiraling out of control, but seem oblivious to the fact that they own an abandoned network of pipelines for transporting oil products (gas, diesel fuel, CLU), left at the mercy of scrap metal thieves, and which, if it were adequately exploited, could partially solve the fuel issue.

The officials of the Ministry of Public Finance (MFP) admit: "Transporting oil products through pipelines is the cheapest, fastest, least polluting and more efficient (ed. note: than using the railroads or the roads). The network for transporting oil products is the public property of the state, it belongs to the Ministry of Finance and is managed by the Ministry of the Economy".

The pipelines of the state can take the end products of the refineries of OMV Petrom (Brazi, Câmpina, Piteşti), Midia Năvodari (Rompetrol) and Teleajen (Lukoil) and can pump them to Bucharest, Constanţa, Braşov, Craiova, and Constanţa. Experts claim that using the pipelines can reduce costs by as much as 50%.

• The abandoned pipelines, the turf of the scrap thieves

Even though the authorities admit that the transport network is important, the pipelines, which had a book value of 1,100 billion ROL in 2002, have been lying completely abandoned for, at the whim of scrap thieves.

After the liquidation of state owned company Petrotrans in 2007, the pipes became the favorite target of scrap and "black gold" thieves.

The last drops of gas and diesel fuel traveled through the Ploieşti Constanţa pipeline in 2005, and in 2006 on the Midia Constanţa pipeline in 2006.

A lot of times, lawmen were caught stealing gas and diesel fuel from the pipelines, together with the thieves.

The absolute record was the theft of 96,000 tons of oil products, with the damage being valued at 1,500 billion ROL.

The representatives of the Ministry of Public Finance reveal the extent of the damage: "No pipeline can currently be used without undergoing maintenance, repairs and retooling".

• The crucial decision: keeping the network or scrapping it

The state will now have to make a crucial decision : whether to keep or dismantle the entire system, which dates back all the way to 1914-1915.

"The Ministry of the Economy will launch the procedure for the selection of a technical consultant that would perform both the technical evaluation of the pipeline system, as well as a feasibility study that would decide whether the system should be kept or dismantled", the representatives of the Ministry of Public Finance said.

According to them, "the decisions on the future use of the transport pipelines and/or the dismantling of the system and the subsequent environmental cleanup of the land to allow for its repurpose will be made based on the results of the feasibility studies".

• Specialists: Leasing some of the segments, a potential solution

The pipeline network crosses 15 of Romania"s counties, spans approximately 1800 km and was built to supply the refineries, as well as to ship the oil products made in Piteşti and Ploieşti, to Oil Terminal Constanţa, from where they would be exported.

The last technical revision of the pipelines took place in 2004-2005, in order to establish the costs for retooling and modernization. The cost of retooling the Ploieşti-Constanţa, Ploieşti Bucharest and Midia-Constanţa pipelines exceeded 135 million Euros.

Experts claim that the best alternative would be to initiate a debate involving the oil companies and the leasing of some of the rehabilitated sectors to any operators that would be interested. They also claim that the network should be kept for use in the regional energy projects that Romania is involved in.

So far, the officials of the Ministry of Public Finance claim that they did not receive any letters of intent for the lease of any segment of the network, the reason for that being most likely the technical state of the network.