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Transneft to pull out of Rosneft Far East pipeline
Reuters – Mon, Sep 30, 2013 7:08 AM EDT
MOSCOW (Reuters) – Russia’s pipeline monopoly Transneft (MCX:TRNFP) has decided to withdraw from building a pipeline to Rosneft’s (MCX:ROSN) Far East Komsomolsk refinery due to an expected freeze on transportation tariffs, a company executive said.
The two sides are at odds over the financing of the expansion of the Eastern Siberia-Pacific Ocean (ESPO) pipeline and a spur line to China as Rosneft plans to increase oil supplies to Beijing.
Russia will freeze tariffs on state-regulated services including gas, electricity and railways in 2014 in a move to tackle inflation which at the same time will force companies to cut investment plans.
Tariffs are the sole revenue source for Transneft and the company expects the freeze to slash its revenues by more than 30 billion roubles (574 million pounds) next year.
First Vice President Maxim Grishanin told reporters that the oil transportation tariff is not expected to rise after October 1, 2013.
Rosneft and Transneft agreed to build a spur to Komsomolsk refinery last year to supply the plant from the ESPO pipeline directly.
The refinery, which has an annual capacity of 8 million tonnes, currently receives crude by rail only. -
Here is an update Rosneft Coking Komsomolsk Refinery projects & P/L Transneft has pulled out of Building the P/L to Far East Komsomolsk and tied to China spur line, due to Russia Freeze on Transportation. The P/L project would impact volume of West Siberian Crude delivered to Komsomolsk (currently some crude moves from existingTransneft P/L by rail from Uyar & Zuy Rail Connections to the Refinery).
Some of expansion projects at Komsomolsk have been delayed until 2013 completion due to incidents and environmental requirements. The CBI-Lummus 17-25 MBD Delayed coker was completed in mid-2011 but startup delayed until 2012 with first coke production in June 2012.
Note – Komsomolsk also has 150 kstpy petcoke calciner located at the refinery.
Rosneft now has Coke Cutting-Water Treatment project (~$300MM Rubles) that is to complete in Nov 2013. Rosneft also has some Environmental investments and Chevron Hydrocracking upgrade to make EU 4 & 5 products completing by end 2013/first 2014.
Regards -
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