ANNOUNCED AS TEMPORARYNo
On 6 March 2013, the European Commission allowed Polish authorities to grant aid to the International Pipeline Company "Sarmatia" Sp. z o.o (hereafter: Sarmatia). The direct grant worth EUR 129.85 million (PLN 545 million) shall come from EU's Environment and Infrastructure Operational Programme and will be used for the construction of the Polish part of the oil pipeline connection between a tank depot in Brody, Ukraine and a storage depot in Adamowo, Poland.
The beneficiary, Sarmatia, was established in July 2004 by the Poland-owned PERN 'Przyjazn' S.A. (24.75% of shares) and the Ukrainan O.S.A. 'Ukrtransnafta' (24.75%) for the construction of the pipeline extension which shall become part of the Euro-Asian Oil Transportation Corridor. Since October 2007, further shareholders of the beneficiary company are the State Oil Company of Azerbaijan Republic (24.75%), as well as Georgian Oil and Gas Corporation Ltd. (24.75%) and Lithuanian AB 'Klaipedos Nafta' (1%).
The investment will include the construction of an underground steel pipe conduit, a main pumping station in Brody, 10 cut-off valve stations, as well as an industrial computer controlled system. The total cost of the project which should be completed by the end of 2015 amounts to EUR 680.05 million (PLN 2854.35 million).
The Commission pointed out "that whilst the activities of Sarmatia involve transport and trade of oil into Poland, that there are alternative routes for oil supply in Poland and other Member States of the European Union. As a result, competition exists for oil supplies, which risks being distorted by the aid to the construction of a construction of the oil pipeline between Brody and Adamowo. Likewise, oil is traded between Member States and, as pointed out by Poland '...', supplies entering the planned pipeline can be sourced thereafter, for instance, to other Member States of the European Union.
Accordingly, the aid distorts, or threatens to distort competition and affect trade between Member States." (para. 35 & 36, letter from the EC to Poland, Brussels 6.3.2013)
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory.
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