Transneft confident that ESPO oil quality will not deteriorate after new fields brought online
MOSCOW. Oct 15 (Interfax) - Russian pipeline monopoly OJSC Transneft is confident that the quality of the oil transported via the Eastern Siberia-Pacific Ocean (ESPO) pipeline system will not deteriorate after new fields are joined up to the system.
"Indeed, along with Siberian Light, which we transport via a dedicated thread from Siberia to Novorossiysk (in 2012 a shipment of sweet crude was transferred there from Tuapse), both the ESPO blend and this very export direction to the port of Kozmino are premium for oil companies. The price difference in comparison with Primorye, for example, reaches $20 per tonne. We don't see any reason for the quality of oil in that direction to deteriorate today or in the foreseeable future (2015-2016)," Transneft's Deputy Vice President Igor Katsal said in an interview with the corporate magazine 'Oil Pipeline Transport.'
Projects to build the Zapolyarye-Purpe and Kuyumba-Tayshet oil pipelines, which are oriented towards new fields, will be implemented by 2016.
"The quality that oil companies have announced for both Zapolyarye and Kuyumba fully fit with the characteristics of the ESPO blend (up to 0.65% sulfur and density of up to 850 kilograms per cubic meter). So neither consumers in Asia-Pacific countries nor traders need to worry. The qualitative characteristics of ESPO crude will remain stable, and export volumes will expand with each year," Katsal said.
Major work lies ahead on expanding the ESPO system to hook up to refineries in the Far East, including Komsomolsk, Khabarovsk and a new refinery belonging to Rosneft (CJSC East Petrochemical Company). "But that won't influence the quality of the export blend," he assured.
However, the hike in production that oil companies have announced does not match up with the selection of oil for refining that they want to receive. The Khabarovsk refinery is scheduled to be hooked up to the system in the first half of 2014, the Komsomolsk refinery should be brought online at the end of 2015, and the East Petrochemical Company refinery - in 2017. "If there is not a corresponding increase in crude supplies via ESPO in the specified timeframes, we will be forced to reduce exports or remove the necessary amounts from the western direction," Katsal said.
The Komsomolsk refinery is anticipated to refine 7 million tonnes of crude a year, and the Khabarovsk refinery - 6 million tonnes. "If they had to be hooked up today, we would have to take the corresponding amounts from Kozmino. Of course, in such a scenario both the prospect for payback and the prospect for reaching a benchmark level would be pushed back. As is well known, the ESPO blend will only be able to serve as a benchmark for the Asia-Pacific market if there are stable shipments of at least 30 million tonnes of oil a year at the port of Kozmino," Katsal said.
