CAPITAL: Prague

MONETARY UNIT: Koruna

REFINING CAPACITY: 187,139 b/cd

OIL PRODUCTION: 7,000 b/d

OIL RESERVES: 6 million bbl

GAS RESERVES: 140 bcf

The Czech crude-oil storage and transportation company MERO CR AS, Kralupy nad Vltavou, took steps during 1996-97 and planned more by 2000 to diversify the country`s sources of crude oil.

Since August 1995, the company had started up a 4.8 million bbl crude-oil storage terminal and installed a 345-km crude-oil pipeline linked to the West European TransAlpine (TAL) pipeline. It planned major modifications of the Czech section of the pipeline that supplies the country from Russia via Slovakia, reported Bretislav Karasek, board vice-chairman and technical director, and Miroslav Cibulka, instrumentation/control specialist.

In the past, Czech and Slovak refineries fully depended on Russian crude oil supplied by the southern branch of the Druzhba I pipeline. The only exception occurred for a few months in 1992 when the Adria pipeline brought in supplies from a Croatian port terminal at Omishail.

Total crude-oil consumption in the former Czechoslovakia on the eve of the end of communist rule in November 1989 had reached 17 million metric tons/year (340,000 b/d).

After the end of communist rule, a new policy was set up by the Czech government to secure crude-oil supply from sources other than Russia.

In January 1993, the Federal Republic of Czechoslovakia split into two fully independent states, the Czech Republic and Slovakia, each adopting its own energy-supply strategy.

Transportation

The Czech Republic studied several alternatives and decided to construct a new pipeline linking the West European TAL system to bring crude oil from the Italian port terminal of Trieste.

Construction of the 28-in. pipeline, known as the MERO-IKL, from the Ingolstadt area to Kralupy nad Vltavou crude-oil terminal, was completed late in 1996.

Czechs won necessary crude-oil supply independence, and three Czech refineries in Litvinov, Kralupy nad Vltavou, and Pardubice can now be supplied either from the east by Russian crudes or from the west by any crude grade.

MERO CR operates the Czech crude-oil pipelines as well as the Kralupy crude-oil terminal. With installed pumping fully operating, each pipeline, MERO IKL and Druzhba, would have a capacity of 200,000 b/d.

Norwegian gas contract

Norway`s state company Den norske stats oljeselskap AS (Statoil) signed a contract early in 1997 with Czech gas pipeline enterprise Transgas to deliver 53 billion cu m of gas for 20 years beginning May 1, 1997.

At first, delivery volumes were 1-1.5 billion cu m/year. They were to rise to a plateau of 3 billion cu m/year by 2003.

Until the Statoil agreement, Russia was the Czech Republic`s sole gas supplier, with deliveries rising to 9.4 billion cu m/year in 1996 from 8 billion cu m/year in 1995.

The gas costs 10-15% more than that supplied by Russian gas giant Gazprom.

Other energy

El Paso Energy International Co., Houston, acquired a 31.15% interest in a $401 million ECKG power project at Kladno, west of Prague. The project involved expansion of an existing 27-MW power plant by 316 MW, 66 MW of which was to be gas-fired and 250 MW fired by coal.

Partners include Northern States Power Co. unit NRG Energy 57.85% and Czech distributor Stredoceska Energeticka 11%.

In other Czech developments:

- Tullow Oil plc, London, was to merge its Czech oil and gas interests with the assets of Czech private company MOH Investments NV.

Tullow planned to form a new company, Medusa Petroleum plc, and raise as much as $12 million on London`s Alternative Investment Market. Tullow was to hold 25% in Medusa, which will focus on exploration and development in central and eastern Europe.

- Kaucuk AS let contract to ABB Lummus Global, Bloomfield, N.J., to build a 130,000 metric ton/year styrene monomer plant at Kralupy.

Lummus was responsible for process licensing, engineering, procurement, construction, and commissioning. The plant was to use Lummus/UOP Classic styrene technology. ABB Simcon was to provide advanced process control. Start-up was slated for early in 1999.

- In late 1997, the forced resignation of Czech Prime Minister Vaclav Klaus amid an election scandal added to the troubles of a country struggling with economic problems and a weak currency.