Oil spreads over Leningrad region
On Wednesday, RF Prime Minister Vladimir Putin dedicated his time to the issues of crude and oil products export. He participated in launching of the first complex of Sever project in Primorsk and then held a meeting in Ust-Luga dedicated to construction of PBS-2. At the meeting it was decided to make BPS-2 end point not in Primorsk but in Ust-Luga. The system will be used for transportation of both crude and oil products. Thus, the Leningrad region gets a strategic role as the main region to export Russian hydrocarbons though experts are still not sure there will be oil enough to load all the pipelines.
Launch of “Northern” flow
On May 14, 2008, AK Transnefteproduct OJSC put into operation the first launch complex of oil products pipeline Kstovo-Yaroslavl-Kirishi-Primorsk (“Sever” project) and a sea terminal specializing in transshipment of light oil products in the port of Primorsk, which makes it possible to redirect part of export flow from the foreign ports of the Baltic Sea. As of today, the complex is capable of handling 8.4 million tonnes of oil products per year. In ten months it is planned to raise the capacity to 17 million tonnes. Vladimir Putin views the project’s perspectives favorably. “There is a possibility to raise the terminal’s capacity to 24 million tonnes provided that the refineries in Kirishi, Nizhnyaya Volga and Tatarstan are upgraded according to the schedule to redirect export cargo from the ports of the Baltic states to Russian ports,” Prime Minister said.
According to RF Transportation Minister Igor Levitin, annual transshipment of liquid bulk cargo in the port of Primorsk is to grow from 75 million tonnes to 120 million tonnes. He also said a railway line and a 10-12 - mln tonne terminal will start next year.
In 2007, port Primorsk transshipped 75 million tonnes of oil within the framework of BPS project (Baltic Pipeline System).
Determination of southern plans
The next place visited by Vladimir Putin was Ust-Luga, where he held a meeting dedicated to construction of PBS-2. This mere fact suggested that the port is likely to become the end point of the new pipeline. It should be reminded that the BPS-2 project emerged during an oil conflict between Russia and Belarus in January 2007, when Russia did not supply oil to Europe for four days via the Druzhba pipeline after Belarus had refused to let Russian transit oil flows pass without Russia paying a transit duty. The project was initiated by President Putin who now says that Ust-Luga as the end point of BPS is more attractive economically. According to Transneft calculations, pipeline to Primorsk would cost RUR 91.7 billion, while that to Ust-Luga – RUR 78 billion. Putin also said that construction of BPS-2 is included into the master plan for Ust-Luga development till 2015. Besides the oil pipeline, there will be an oil product pipeline to transport oil products from Kirishi refinery Ust-Luga. It will contribute to sale of extra volumes of oil products, which are likely to appear upon refinery modernization. According to the Prime Minister, 30 million tonnes of crude and 18-20 million tonnes of oil products will be required to load BPS-2 annually.
Oil volumes required
However, experts doubt that growth rates of oil production will correspond to the speed of pipelines construction so that there were oil enough to fill all of them as apart of the projects in the Baltic region there is a project on construction of ESPO pipeline (East Siberia – Pacific Ocean). According to Mikhail Grigorjev, member of Advisory Council on fuel-and-energy complex (Office of the Presidential Envoy in the North-West region), Director of Geological Consulting Center Gecon, by 2020 lack of Russian export crude may total some 15 million tonnes.
At the same time Vladimir Putin does not see any problems with loading of BPS-2, as the forecasts say oil production will raise by 67.5 million tonnes by 2015.
Launch of “Northern” flow
On May 14, 2008, AK Transnefteproduct OJSC put into operation the first launch complex of oil products pipeline Kstovo-Yaroslavl-Kirishi-Primorsk (“Sever” project) and a sea terminal specializing in transshipment of light oil products in the port of Primorsk, which makes it possible to redirect part of export flow from the foreign ports of the Baltic Sea. As of today, the complex is capable of handling 8.4 million tonnes of oil products per year. In ten months it is planned to raise the capacity to 17 million tonnes. Vladimir Putin views the project’s perspectives favorably. “There is a possibility to raise the terminal’s capacity to 24 million tonnes provided that the refineries in Kirishi, Nizhnyaya Volga and Tatarstan are upgraded according to the schedule to redirect export cargo from the ports of the Baltic states to Russian ports,” Prime Minister said.
According to RF Transportation Minister Igor Levitin, annual transshipment of liquid bulk cargo in the port of Primorsk is to grow from 75 million tonnes to 120 million tonnes. He also said a railway line and a 10-12 - mln tonne terminal will start next year.
In 2007, port Primorsk transshipped 75 million tonnes of oil within the framework of BPS project (Baltic Pipeline System).
Determination of southern plans
The next place visited by Vladimir Putin was Ust-Luga, where he held a meeting dedicated to construction of PBS-2. This mere fact suggested that the port is likely to become the end point of the new pipeline. It should be reminded that the BPS-2 project emerged during an oil conflict between Russia and Belarus in January 2007, when Russia did not supply oil to Europe for four days via the Druzhba pipeline after Belarus had refused to let Russian transit oil flows pass without Russia paying a transit duty. The project was initiated by President Putin who now says that Ust-Luga as the end point of BPS is more attractive economically. According to Transneft calculations, pipeline to Primorsk would cost RUR 91.7 billion, while that to Ust-Luga – RUR 78 billion. Putin also said that construction of BPS-2 is included into the master plan for Ust-Luga development till 2015. Besides the oil pipeline, there will be an oil product pipeline to transport oil products from Kirishi refinery Ust-Luga. It will contribute to sale of extra volumes of oil products, which are likely to appear upon refinery modernization. According to the Prime Minister, 30 million tonnes of crude and 18-20 million tonnes of oil products will be required to load BPS-2 annually.
Oil volumes required
However, experts doubt that growth rates of oil production will correspond to the speed of pipelines construction so that there were oil enough to fill all of them as apart of the projects in the Baltic region there is a project on construction of ESPO pipeline (East Siberia – Pacific Ocean). According to Mikhail Grigorjev, member of Advisory Council on fuel-and-energy complex (Office of the Presidential Envoy in the North-West region), Director of Geological Consulting Center Gecon, by 2020 lack of Russian export crude may total some 15 million tonnes.
At the same time Vladimir Putin does not see any problems with loading of BPS-2, as the forecasts say oil production will raise by 67.5 million tonnes by 2015.