Kazakhstan and Ukraine will create a working group to study the possibility of transporting Kazakh oil exports through a pipeline between the Black Sea port of Odessa and the city of Brody, Kazakhstan's Energy and Mineral Resources Ministry said.

Ukraine built the Odessa-Brody pipeline in 2001 as a project to transport Caspian oil to European markets. The pipeline has a capacity of 9 mm tpy. However, the pipeline has yet to become operational due to a lack of users.

It cost the Ukrainian government $ 450 mm to build the Odessa-Brody pipeline, which was originally supposed to be extended first to the Polish city of Potsk and later to the Gdansk refinery.

Kazakhstan is considering financing the second stage of the pipeline to Potsk, the spokesman said. Kazakhstan doesn't have much time to make a decision, however, because several Russian oil companies are lobbying the Ukrainian government to reverse the 52 km of the pipeline that are idle.

Russia's third-largest oil major TNK-BP, a joint venture between Tyumen Oil and UK oil and gas major BP, has said it wants to export crude by reversing the flow and loading oil tankers at Odessa.

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