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Moldova/Ukraine: Dispute Over Oil Terminal Sharpens

Kyiv, 26 June 1998 (RFE/RL) -- Plans to build an oil transfer terminal in Moldova are stirring opposition in Ukraine, which worries of an adverse environmental impact.

The 38-million-dollar project is scheduled for completion next year. The European Bank of Reconstruction and Development (EBRD) is providing a $25.5 million credit for the construction.

The terminal would allow Moldova to transfer petroleum to and from tankers plying the Danube, bringing considerable savings for the small landlocked country>

"This is just the kind of project we need," noted Moldova Deputy Premier Minister Ion Gutsu at a recent EBRD conference. "It will create critical infrastructure ... and enable our economy to grow."

But Ukraine sees the terminal in a very different light. "Our experts recently went to the site and inspected the project," Odessa Regional Administration spokesman Yuri Shiroparov told RFE/RL. "And they found many things wrong with it."

Situated on the Danube's left bank south of the village of Dzhurdzhulesht and snug up against the Ukrainian border, the terminal could transfer 2.1 million tons of oil annually, giving Moldova an alternative to Russian energy deliveries.

Ukraine has no problem with that. But Kyiv is arguing that because the terminal will be servicing tankers is only a few kilometers upstream in the middle of Europe's largest wetland, the project endangers the environment.

"One of the most important problems our experts found is that 'the terminal' threatens our ecology and vulnerable wetlands," Shiroparov said. "We need to make sure that our interests are protected."

The Danube Commission, comprising representatives from countries bordering on the river, could be a forum to iron out differences about the environmental impact of development in the basin. This is not the case, however.

The Ukrainians charge that the Moldovans might have misled them, bringing to near-completion a major industrial project without providing full information on the scope of the work.

But Moldovan project managers counter that Kyiv has had ample opportunities to learn about the Dzhudzhulesht Terminal, as far back as 1994.

"Ukrainian and Moldovan commissioners met in Kishinev on Nov. 3, 1994 to discuss the problems of the terminal," said Deputy General Director of the Terminal S.A., Yakov Mogorian in a recent newspaper article. "Results of an independent Dutch study were presented in Kishinev on Dec. 9, 1994 ... on Nov. 23 the Moldovan side invited 'Ukrainian ecological representatives' ... but no one came, and no one made any comments."

The project went through several permutations before finalizing into a Greek/Moldovan/EBRD joint venture. The first funds were obtained in late 1996, and by 1997 Dutch general contractor Fredric R. Harris had begun construction.

Kyiv demands now that Harris' blueprints are to be approved by its Ministry of Ecological Protection. Protests have been made to the Danube Commission and, more recently, Ukraine has tightened border control near the frontier town of Reni. Dotted with woodlands, lakes, and swamps, the Danube frontier near Reni and Dzhurdzhulesht used to be a place where hunters could shoot ducks and fishermen hook pike, without too much attention paid to passports. Not any more. "The Ukrainian border troops' defensive works and barbed wire opposite the terminal construction site are more intense than what you would see on the Tadjik-Afghan border," said Mogorian.

And there is little prospect that the dispute will end any time soon.