This will resurrect a long-standing plan to transport crude oil from the Caspian region into Europe, by-passing Russia. The project will cost an estimated $500 million and is expected to be operational by 2011. When completed, the entire pipeline will be more than 1,160km long with a capacity of 103 million brl/yr of crude oil. The main stake-holders will be the Polish company, PERN Przyjazn, Ukraine's Ukrtransnafta, Azerbaijan's Socar, Georgian GOGC (the Georgian Oil and Gas Corporation), and Lithuania's Klaipedos Nafta. Ukrtransnafta, PERN, Socar and GOGC will each own 24.75% of the shares, and Klaipedos Nafta will own 1%. The Odessa-Brody pipeline was completed in 2002 in order to transport crude oil arriving at Odessa from the former-Soviet Caspian countries, Azerbaijan and Kazakhstan, to Europe via Poland. Oil-rich Kazakhstan was envisaged as the pipeline's main supplier. The project was strongly backed by the US and the EU because it established a potential oil-supply route into Europe that was independent of Russia. Currently, Europe imports around 20% of its oil from Russia, with 1,200,000brl/d of crude oil being transported through Russia's Druzhba pipeline alone. It was reasoned, therefore, that any diversification of supply would enhance Europe's energy security. After Odessa-Brody's completion, however, Russia refused to permit either Kazakhstani or US companies in Kazakhstan to use its territory or the Novorossiysk maritime terminal to deliver oil to the Ukraine. It appeared that Moscow either wanted to maximize oil and gas exports through its own territory, or was after a stake in the Odessa-Brody project. As a result, Kazakh oil supplies to Odessa dwindled and Europe grew reluctant to build the connecting pipelines needed to link Odessa-Brody to refineries. The pipeline remained idle. In 2004, the then-prime minister of the Ukraine, Viktor Yanukovich, signed an agreement with Russia to reverse the intended flow of the pipeline and use it to pump Russian Urals Blend oil southward to Odessa's Pivdenny terminal, for export via the Black Sea to the Mediterranean. Mr Yanukovich is notoriously pro-Russian, as was his president at the time, Leonid Kuchma. Aside from political allegiance to Moscow, Kiev also reasoned that the transit fees raised by the reversal would be preferable to leaving the pipeline redundant. Actual returns never met expectations, however. Instead of transporting a projected 66 million brl/yr of crude, the pipeline carried 58 million barrels between September, 2004, and October, 2006. Consequentially, it now operates at a loss to Ukraine. In 2005, after the pro-Western Viktor Yushchenko was inaugurated as Ukrainian president, he immediately revived plans to extend the pipeline to Poland and re-reverse its flow to use it as originally intended – as an oil-supply route from the Caspian to Europe bypassing Russia. The European Commission responded with enthusiasm describing the pipeline as a "crucial infrastructure project in the context of EU and Ukrainian policies for security of oil supplies." Lithuania has good reason to back the Odessa-Brody-Gdansk project. It was briefly left without oil in July, 2006, when Moscow shut-off a spur of its Druzhba pipeline, citing technical reasons. This followed the purchase of Lithuania's Mazeikiu oil refinery by a Polish company, PKN Orlen, though Moscow had reportedly wanted it to be sold to a Russian company. The closure of the pipeline has meant that all of Lithuania's oil imports must now come via the sea. As a result Mazeikiu's profits shrank five-fold to $55.6 million, compared to 2005. Despite political enthusiasm for the project, concerns about its commercial feasibility have been raised. Fierce competition from cheaper Russian oil will always be a challenge but the major problem envisioned is a shortage of crude oil to supply the pipeline. Oil production in the Caspian has fallen-short of levels expected in the 1990s. Azerbaijan has limited reserves, estimated at 2bn brl. Kazakhstan, which was originally envisioned as Odessa-Brody's main supplier, is not a signatory to the agreement. In March 2007, President Nursultan Nazarbayev suddenly made Kazakhstan's participation conditional on Russian involvement. This was not an acceptable option to the Odessa-Brody pipeline's backers, so Kazakhstan and its 39.8bn barrels-worth of oil reserves remains excluded from the initiative. In addition, much of the region's exportable oil is tied to existing contracts, some of which will make use of the Baku-Tbilisi-Ceyhan (BTC) pipeline into southern Europe. The BTC pipeline, in operation since 2005, has a much larger capacity than Odessa-Brody (at least 366m brl/yr compared to 103m brl/yr). It also by-passes Russian territory. Odessa-Brody-Plock's backers have argued that an oil supply to NE Europe, independent of Russian control, is essential, no matter how moderate. They say that Russia uses its energy exports as a tool of foreign policy, cutting supplies to influence domestic politics in other countries. Ukrainian President Yushchenko interpreted Russia's 2 October threat to cut off Ukrainian gas supplies, unless a $1.3-billion debt was settled by the end of the month, as political meddling in Ukraine's formation of a coalition government. In fact, Russia behaved quite responsibly. Moscow waited until after the elections had taken place to make the threat. It also preceded it by a month-in-advance warning to both the European Commission and NordStream partner E.ON Ruhrgas in order to minimize the potential impact of its actions on EU gas supplies. Russia then withdrew the threat once Ukraine arranged a repayment plan. It is perhaps telling that the pipeline project has been agreed between former members of the Soviet Union and the Warsaw Pact. Their proximity to and history with Russia are bound to have influenced their backing for this commercially-problematic project. It will be interesting to see whether the extension to Gdansk will actually materialize or whether the agreement is more political in nature. It is also noteworthy that despite the rhetoric, other EU leaders continue to prioritize their individual country's energy needs. As the EU called for greater unity in dealing with Russia on oil and gas at the Summit in Vilnius, President Sarkozy of France cancelled his attendance at the last minute to meet with Russia's President Putin to discuss energy initiatives.