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. Last Updated: 07/27/2016

Black Sea Terminal Project Assailed as Political Move

KIEV -- A top adviser to Ukraine President Leonid Kuchma said Tuesday that an ambitious project to build an oil terminal near the Black Sea port of Odessa should be re-examined and at the very least scaled down.

Volodymyr Kuznetsov, an adviser on economic issues, told a news briefing that construction of the terminal 60 kilometers east of the port had been based on political considerations.

The terminal is aimed at reducing Ukraine's dependence on Russian oil imports, possibly by importing from the Middle East. Plans call for an annual capacity of 40 million tons, equivalent to Ukraine's needs.

"The question of building an oil terminal must be re-examined. It is a shame this was approached not from an economic standpoint but rather under the pressure of political considerations," Kuznetsov said.

"We must determine whether it is economically sensible. We must look again at proposed annual capacity of 40 million tons of oil. We cannot purchase such a quantity of oil in the foreseeable future."

Construction of the terminal was ordered by Ukraine's first post-independence president, Leonid Kravchuk.

Work began in May, but was halted last month by a court order initiated by local authorities who said the land for the project had been acquired illegally. They also alleged the project would cause environmental problems.

Some $8.5 million has been sunk into the project. Although court proceedings have been halted, work on the terminal is currently confined to transporting equipment to the site.

The first stage of construction, over two and 1/2 years, is to provide for annual capacity of 12 million tons of oil.

Valery Balukh, deputy chairman of Odessa's regional council, said last week construction could be resumed only if Ukraine's parliament altered laws on purchasing land. He also demanded the government allocate funds to provide ecological safeguards.

Nationalist members of parliament accuse the Russian-speaking Odessa regional council of putting the brakes on the project to maintain Ukraine's dependence on Moscow.