Lukoil capex on Kharyaga-Yuzhnoye Khylchuyu oil pipeline totals $230 mln
MOSCOW. Nov 27 (Interfax) - Lukoil's capital expenditures on the Kharyaga - Yuzhnoye Khylchuyu oil pipeline totaled about $230 million, according to a company presentation.
At the beginning of October, Lukoil finished building the Kharyaga - Yuzhnoye Khylchuyu interfield oil pipeline, which has annual productivity of 4 million tonnes a year. This 158-kilometer pipeline was designed to transport oil from the Sever-TEK (Kharyaga) terminal to the Yuzhnoye Khylchuyu oil delivery and receipt point, with subsequent oil submission to the Yuzhnoye Khylchuyu - Varandey interfield pipeline and shipment through its own terminal.
Once this pipeline is commissioned, it will reduce the investment return period for the construction of the Varandey terminal by substantially boosting its load. In addition, Lukoil will be able to cut spending on oil transport via the Baltic Pipeline System (BPS). Further, part of the burden can be removed from the Kharyaga-Usa interfield oil pipeline and the Usa-Ukhta and Ukhta-Yaroslavl main pipelines, which are currently running in excess of their throughput capacity.
"Due to differences in tariffs, EBITDA growth will be $200 million a year. After measures are conducted to stabilize oil quality, overall EBITDA growth due to tariff differences, improved oil quality and the bbl difference could double," Lukoil expects.
Last year, due to decreased oil production at the Yuzhno-Khylchuyu field, oil shipments through the export terminal in the town of Varandey in the Nenets Autonomous Region fell to 4 million tonnes of oil a year, compared to 7.5 million tonnes in 2010.
Oil production was more than halved at the field to 3.3 million tonnes last year for several unforeseen geological reasons.