EXCLUSIVE-UPDATE 1-Russia to resume oil flow to Ukraine refinery, boon for Yanukovich

Tue Dec 17, 2013 6:10am EST

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* Ukraine seeks loans from Russia

* Traders say oil supplies to resuem to Odessa refinery (Adds details)

By Dmitry Zhdannikov and Gleb Gorodyankin

MOSCOW, Dec 17 (Reuters) - Russia plans to restart oil supplies to Ukraine's Odessa refinery after a three-year drought, traders said, in a sign Moscow is ready to support its neighbour after it spurned a trade deal with the European Union.

Ukraine hoped to secure new loans from Russia on Tuesday to help fend off an economic crisis, although any deals reached at talks in the Kremlin could fuel anti-government protests in Kiev.

President Viktor Yanukovich was also expected to seek a discount for Russian gas supplies during the talks with President Vladimir Putin as Ukraine's financial difficulties could hit fuel supplies this winter.

The plan to resume supplies by pipeline to the Odessa refinery could be a reward for Ukraine keeping the EU at arm's length and opting instead to revive economic ties with its former Soviet master Moscow.

A preliminary Russian oil exports schedule for the first quarter of 2014 showed Russia could supply 750,000 tonnes of oil to the refinery worth some $600 million, traders told Reuters, citing a draft schedule.

The refinery is controlled by Ukrainian industrial group VETEK, which has enjoyed strong support from the authorities.

The schedule has yet to be approved by the Russian Energy Ministry.

The Odessa plant, designed to process 70,000 barrels per day, was shut in October 2010 due to its poor financial performance. It was relaunched this October after VETEK bought it from Russian oil firm LUKOIL. (Reporting by Dmitry Zhdannikov and Gleb Gorodyankin; writing by Vladimir Soldatkin; editing by Steve Gutterman and Timothy Heritage)

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