“Northern” way for oil products
Ceremonial launch of oil products pipeline Kstovo (Vtorovo)-Yaroslavl-Kirishi-Primorsk (“Sever” project) and Primorsk terminal will be held in the Leningrad region on May 14. It is expected that the new line for transportation of light oil products will make it possible to decrease the transportation costs. At the present time, a significant share of Russia’s export of light oil products is conducted through the Ventspils sea port. The lack of own export pipelines in Russia leads to annual losses of the budget in the amount of $200 million associated with the transit of oil products through the Baltic States.
As PortNews IAA learnt from the press center of AK Transnefteproduct, pumping of oil products by Kstovo (Vtorovo)-Yaroslavl-Kirishi-Primorsk will commence in the first half of May. The project was approved by Decree of the Russian Federation Government № 853-p of June 24, 2002 and included in the government program “Energy-Efficient Economy”. The pipeline’s length is 1,056 kilometers. Annual capacity of the oil products pipeline and the terminal is 26.4 million tons. The first stage of construction will ensure a capacity of 17 million tons per year. The first launch complex will provide 8.4 million tons. According to Transnefteproduct, Primorsk will be used for export of Russian low-sulfur diesel fuel Euro-5.
The capacity of the terminal’s tank farm will make 240,000 m3 (annual capacity 8.4 million tonnes). It will consist of 12 vertical reservoirs. When the capacity is raised to 17 million tonnes per year the tank farm will number 24 tanks with total volume of 480,000 m3, which is later to be raised to 720,000 m3 (36 tanks). The project’s total value makes $1.3 billion with 42% of Transnefteproduct own funds and 58% - VTB credit.
Today light products are exported via two terminals on the Baltic Sea. In 2007, Petersburg Oil Terminal exporting light oil products delivered by pipeline from Kirishinefteorgsintez (Leningrad region) transshipped 3.4 million tonnes of products. In the reported period, RPK-Vysotsk LUKOIL-II exported 4.8 million tonnes of diesel fuel. At the present time, a significant share of Russia’s export of light oil products is conducted through the Ventspils sea port (Latvia). Experts say the lack of own export pipelines in Russia leads to annual losses of the budget in the amount of $200 million associated with the transit of oil products through the Baltic States.
In late April, Federal Tariff Service approved the tariff for pumping of oil products by Sever pipeline to Primorsk at the level of RUR 681.2 per tonne maximum (may be decreased). It is cheaper as compared with the use of pipeline to Ventspils, which costs RUR 711 per tonne. According to AK Transnefteproduct, as soon as the pipeline is launched it will be filled by 100%. For that purpose the company held extra negotiations with oil product producers and exporters.
“The launch of Sever project is an important stage in the development of Russia’s oil transport system; the new pipeline will ensure the required diversification of supply to Europe and will decrease transit risks,” Denis Demin, Director of information-and-analytical department of Energocapital IC, says. “Considering convenient location of transshipment facilities in Primorsk and well developed infrastructure of BPS the new rout seems to become quite convenient for exporters.” Demin also emphasized that oil product transportation to Ventspils is one of the most expensive today; railway transportation of oil products to the ports is not efficient either.
According to Demin, today’s political situation prevents full loading of BPS: Russia has been quite active recently in “unloading” port facilities of Latvia and Estonia in favor of national ports. According to forecasts, export of oil products via the ports of the Baltic states may reach 20–30 million tonnes per year by 2010. Nowadays regular works are carried out to increase the capacity of the existing refineries. Thus new port and pipeline facilities are in high demand today.
Mariya Mokeicheva
As PortNews IAA learnt from the press center of AK Transnefteproduct, pumping of oil products by Kstovo (Vtorovo)-Yaroslavl-Kirishi-Primorsk will commence in the first half of May. The project was approved by Decree of the Russian Federation Government № 853-p of June 24, 2002 and included in the government program “Energy-Efficient Economy”. The pipeline’s length is 1,056 kilometers. Annual capacity of the oil products pipeline and the terminal is 26.4 million tons. The first stage of construction will ensure a capacity of 17 million tons per year. The first launch complex will provide 8.4 million tons. According to Transnefteproduct, Primorsk will be used for export of Russian low-sulfur diesel fuel Euro-5.
The capacity of the terminal’s tank farm will make 240,000 m3 (annual capacity 8.4 million tonnes). It will consist of 12 vertical reservoirs. When the capacity is raised to 17 million tonnes per year the tank farm will number 24 tanks with total volume of 480,000 m3, which is later to be raised to 720,000 m3 (36 tanks). The project’s total value makes $1.3 billion with 42% of Transnefteproduct own funds and 58% - VTB credit.
Today light products are exported via two terminals on the Baltic Sea. In 2007, Petersburg Oil Terminal exporting light oil products delivered by pipeline from Kirishinefteorgsintez (Leningrad region) transshipped 3.4 million tonnes of products. In the reported period, RPK-Vysotsk LUKOIL-II exported 4.8 million tonnes of diesel fuel. At the present time, a significant share of Russia’s export of light oil products is conducted through the Ventspils sea port (Latvia). Experts say the lack of own export pipelines in Russia leads to annual losses of the budget in the amount of $200 million associated with the transit of oil products through the Baltic States.
In late April, Federal Tariff Service approved the tariff for pumping of oil products by Sever pipeline to Primorsk at the level of RUR 681.2 per tonne maximum (may be decreased). It is cheaper as compared with the use of pipeline to Ventspils, which costs RUR 711 per tonne. According to AK Transnefteproduct, as soon as the pipeline is launched it will be filled by 100%. For that purpose the company held extra negotiations with oil product producers and exporters.
“The launch of Sever project is an important stage in the development of Russia’s oil transport system; the new pipeline will ensure the required diversification of supply to Europe and will decrease transit risks,” Denis Demin, Director of information-and-analytical department of Energocapital IC, says. “Considering convenient location of transshipment facilities in Primorsk and well developed infrastructure of BPS the new rout seems to become quite convenient for exporters.” Demin also emphasized that oil product transportation to Ventspils is one of the most expensive today; railway transportation of oil products to the ports is not efficient either.
According to Demin, today’s political situation prevents full loading of BPS: Russia has been quite active recently in “unloading” port facilities of Latvia and Estonia in favor of national ports. According to forecasts, export of oil products via the ports of the Baltic states may reach 20–30 million tonnes per year by 2010. Nowadays regular works are carried out to increase the capacity of the existing refineries. Thus new port and pipeline facilities are in high demand today.
Mariya Mokeicheva