Transneft unable to pump diesel fuel to Hungary due to problem with Ukrainian customs
MOSCOW. Feb 9 (Interfax) - Prikarpatzapadtrans, a subsidiary of Russia's Transneft , cannot begin pumping diesel fuel to Hungary via the Samara-West and Grozny-Armavir-Trudovaya pipelines since the Ukrainian customs authorities have not approved this, Transneft's press secretary, Igor Demin, told Interfax.
"The Ukrainian customs authorities say that diesel fuel pumping was suspended by an order from the investigative committee, meaning that they believe the investigative committee must also allow pumping to resume," he said.
"And no one contested the decision of the Rivne arbitration court that Transneft can begin pumping client diesel fuel. It has entered into legal force," Demin added.
There are currently 86,000 tonnes of client diesel fuel and about 30,000 tonnes of technical diesel fuel in the Ukrainian pipeline segments, Demin said.
The court ruled that the provisional measures banning the movement of fuel on the Ukrainian segment of the oil product pipeline apply only to technical diesel fuel. Transneft was planning to begin pumping client diesel fuel on Monday based on this decision.
A court hearing on the ownership of the diesel fuel will be held on February 12. Transneft will argue that if the oil production pipeline can function normally without the technical diesel fuel, then the diesel fuel may not be transferred into Ukraine's state ownership.
Transneft has filed an appeal with the Supreme Economic Court of Ukraine against a ruling by the Rivne appellate economic court that recognized Ukraine's ownership rights to sections of the Samara-West and Grozny-Armavir-Trudovaya oil product pipelines that run through its territory, totaling 1,433 km, the adviser to the Russian oil pipeline monopoly's president, Igor Dyomin, told Interfax. Supreme Economic Court of Ukraine has so far halted the decision of Rivne appellate economic court.
The court of first instance expropriated sections of the pipeline in favor of the Ukrainian State Property Fund but the Rivne court overturned the decision. The Supreme Economic Court returned the case to the Rivne court for a new hearing, and the latter on November 25 recognized Ukraine's title of ownership over the pipeline sections.
The pipeline sections are owned by Prikarpatzapadtrans, a subsidiary of Russian company Transnefteprodukt, which in turn is a wholly owned subsidiary of Transneft. Prikarpatzapadtrans is the only company to transport light petroleum products by pipeline in Ukraine.
If Russian property is expropriated, Demin said, Transnefteprodukt will be forced to halt shipments of oil products on this route. Amid the court disputes, Transneft has already stopped pumping oil products on the system and was previously discussing plans to conserve pipes. Prikarpatzapadtrans' pumping volumes total 1.7 million tonnes of diesel fuel per year, including transit and the domestic market.
The length of the pipelines in dispute totals 1,433 kilometers. According to Transneft, losses have reached 57,900 tonnes of oil products over the last several years, or $62.7 million.