IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 06 Mar 2013 | Removal date: open ended
Still in force

Financial grant

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.
 

AFFECTED COUNTRIES

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AFFECTED SECTORS AND PRODUCTS

120 Crude petroleum & natural gas
2709 Petroleum oils and oils obtained from bituminous minerals, crude.
270900 Petroleum oils and oils obtained from bituminous minerals, crude.
333 Petroleum oils & oils of bituminous materials, other than crude
2710 Petroleum oils and oils obtained from bituminous minerals, other than crude; preparations not elsewhere specified or included, containing by weight 70 % or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic con
271012 Light oils and preparations
271019 Other
271020 Petroleum oils and oils obtained from bituminous minerals (other than crude) and preparations not elsewhere specified or included, containing by weight 70 % or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the bas
399 Other wastes & scraps
2710 Petroleum oils and oils obtained from bituminous minerals, other than crude; preparations not elsewhere specified or included, containing by weight 70 % or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic con
271099 Other

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