Mountains for sale, declares Swedens National Oil Stockpile Agency (NOSA) in promotional material for what must be the most curious asset sale arising from the end of the Cold War.
Having no oil production of its own, Sweden imports crude oil and products. In the 1950s, governments concerns over the Soviet military threat inspired it to establish safe storage for diesel fuel and gasoline.
Huge storage caverns were blasted out of the heart of mountains in which to store oil. Some were built to hold military fuel stocks, others for civil supplies.
Forty-five caverns were built for civil use, each typically holding as much as 100,000 cu m of fuel that could be used to keep hospitals, transportation, and home heating going in a crisis.
Products are stored on a cushion of water in the caverns. Because the caverns are below groundwater level, upward pressure of water keeps the petroleum in place without a need for lining the caves.
West-East access
Per Andersson, assistant attache for science and technology at the Swedish embassy in London, explained that the sites are strategically obsolete because of the end of the Cold War.
NOSA was formed last year and given the task to sell these storage facilities, as well as stored products, by the end of 1999, Andersson said.
Swedens government believes the caverns will provide suitable strategic storage sites for companies wishing to export oil products to eastern European countries while having access to western refineries.
A number of sites are available for sale: at Oskarshamm on the Baltic Sea coast of southern Sweden, at Stroemstad on the North Sea coast near the Norwegian border, on the Isle of Gotland in the center of the Baltic Sea, and at Norrkoeping on Swedens Baltic Sea coast facing Estonia. The latter is said to be suitable for crude oil storage after modest modification.
Other sites will be offered to companies when they have been emptied and cleaned up, Andersson said. Most are in convenient places, but some are still classified as secret.
Price puzzle
Kjell Nyman, NOSA executive vice-president, said the agency is having difficulty pricing the caverns, so terms are open to negotiation.
It would be easier to decide a price if we were dealing only with the national market, Nyman said. Ten of the 45 caverns are on the coast in gateway positions, some with their own harbors. The facilities are a price puzzle because they are unknown so far to open market enterprises.
In caverns to be converted for crude oil storage, as much as $1.5 million will need to be spent on each site by the buyer to install heating equipment, increase capacity of process water treatment plant, and reduce emissions to air. The sites are otherwise ready for immediate use.
Once the caverns have been sold, civil fuel stockpiles will be held at oil company sites, which are nearer to populated areas than the caverns.
Nyman said government is about to sign storage deals with companies.
Selling the civil stores has nothing to do with our military storage, he said. This will be continued as before in sites that will remain a secret to the business community.
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