Glowing Varandey
5.4 million tonnes of export oil were transported via LUKOIL-owned Varandey oil terminal in the Barents Sea with the start of Sovcomflot tankers operation in autumn 2008. Experts say further terminal development has good prospects and will enable LUKOIL to gain market advantages.
Investments in Arctic projects are long-term and require considerable resources to support. Short-term profit-driven business models do not survive in Arctic. Even the biggest international companies will require partnership and cooperation. As for export of Timan-Pechera oil, the situation is more complicated. To use Transneft infrastructure it would require laying out of an separate pipeline linking Timan-Pechera oil-and-gas field with the trunk line which is to become the Baltic Pipeline System later on. It would mix high-quality Timan-Pechera oil with Urals. So today oil delivered to Varandey terminal from Timan-Pechera province by a special pipeline is exported by three 70,000-dwt Sovcomflot tankers built specially for operation at this terminal – Vasily Dinkov, Kapitan Gotsky (both deployed in 2008) and Timofey Guzhenko (deployed in 2009).
As PortNews IAA learnt from Igor Pankov, deputy Director General of SCF Department for Navigation Safety and Quality Management, 3,565,871 tonnes of oil were transported by Sovcomflot vessels in the first half of 2009. During the entire period of operation (from 2008) they exported 5,452,838 tonnes of oil.
According to Aleksandr Eremin, analyst of IC FINAM, Varandey terminal is very significant for LUKOIL. “First of all, it is close to many fields enjoying tax privileges. Secondly, it allows not to use Transneft pipeline and to avoid related expenses. It is also important that the quality of Taman-Pechera oil is much higher as compared with Urals. It would mix in Transneft pipeline finally turning to Urals. So quality edge is possible for LUKOIL when transporting oil via Varandey terminal. In general, operation via sea terminal opens new markets for LUKOIL. In particular, the company is able to deliver oil from Varandey to TRN Refinery in the Netherlands. Besides, the market has recently speculated on LUKOIL plans to acquire 49% of this refinery,” Aleksandr Eremin told PortNews IAA.
Sovcomflot exporting oil from the terminal is also satisfied with the project implementation. As PortNews IAA learnt from SCF review, Varandey Project is acknowledged proved to be successful and technical solutions are acknowledged to be viable.
The Varandey terminal is located in the Barents Sea some 23 km off the coast. It is the final point for export of oil extracted in Timan-Pechora oil and gas province. Oil cargo is pumped to tankers of up to 20,000 tonnes in capacity for further transshipment in Murmansk port via Belokamenka terminal (storage tanker owned by Rosneft). Annual capacity of Varandey is 12 million tonnes. The project comprises sea storage tank farm, sea ice-strengthened berth, two pipelines and other infrastructure facilities. According to PortNews IAA oil shipment from Varandey terminal totaled 1.4 mln t in 2008.
In 2008, the revenue of Varandey Terminal OJSC increased 2.8 times to RUR 3,273,544,000. The cost of sold goods and services increased to RUR 1.270 bln against RUR 468.65 mln in 2007.
73 tankers were handled at the sea ice-strengthened berth of the Varandey oil export terminal on the shore of the Barents Sea (Nenets Autonomous Territory) during a year of its operation.
Ice-class tug-boat Toboy and the Varandey icebreaker built to LUKOIL order as well as two RosMorPort icebreakers ensure safe operation of the terminal and loading of the tankers in ice conditions.