Energy Ministry, FAS against funding product pipelines with crude pumping revenue
MOSCOW. Oct 22 (Interfax) - The Russian Energy Ministry and Federal Antimonopoly Service (FAS) are against funding the construction of petroleum product pipelines with proceeds from pumping crude oil, Anatoly Golomolzin, FAS deputy head, told a press conference.
Reports have said officials from the Federal Tariffs Service and Energy Ministry have agreed on the possibility of redirecting some of the funds that pipeline operator Transneft gets from pumping crude into implementing projects by its subsidiary Transpefteproduct.
Transneft estimates the subsidiary will face a revenue shortfall of 5.4 billion rubles due to the inability of obsolete product pipelines to accept 4 million tonnes of oil products for shipment in 2013, and 6.2 billion rubles from 4.5 million tonnes of lost shipments in 2014, yet the volume of light petroleum product shipments is expected to grow by the year.
Major infrastructure projects will have to be carried out in order to carry the additional volumes. They include expanding the Sever (North) product pipeline's capacity to 15 million tonnes; building the Yug (South) product pipeline; expanding the capacity of the Ufa-Subkhankulovo product pipeline by 2 million tonnes to carry diesel from the Omsk, Perm and Ufa refineries; increasing the capacity of the Almetyevsk-Nizhny Novgorod pipeline by 2.4 million tonnes; connecting with the Antipinsky refinery; expanding infrastructure to supply kerosene for the Moscow aviation hub; and expanding oil depots from Omsk to Chelyabinsk.
But all these projects need additional funding which Transnefteproduct cannot raise by itself.