Court substitutes ban on transshipping CPC oil with fine of 200,000 rubles
KRASNODAR. July 11 (Interfax) - The Krasnodar Regional Court on Monday, July 11, suspended the ban on oil transshipment at the Caspian Pipeline Consortium (CPC), substituting the ban with a fine of 200,000 rubles, an Interfax correspondent reported from the courtroom.
"The Krasnodar Regional Court reviewed an appeal against the decision of the Primorsky District Court of Novorossiysk, which imposed an administrative penalty on the CPC-R in the form of an administrative suspension of activities for a period of 30 days. Having considered the materials, and having heard the arguments of the parties, the court of appeal changed the decision of the district court by imposing a penalty on CPC-R in the form of an administrative fine of 200,000 rubles. The decision has entered into force," according to the court's ruling.
As previously reported, according to the decision of the Primorsky District Court of Novorossiysk, dated July 6, 2022, CPC had to suspend the activities of the maritime terminal for 30 days in order to eliminate the violations identified by the Federal Transport Oversight Service (Rostransnadzor). The consortium filed a petition with the court, requesting to suspend the enforcement of the decision until the entry into force of the judicial act, which would be issued based on the results of the consideration of the complaint against the decision.
The CPC noted in its statement that the law does not permit applying measures that could entail irreversible consequences for the production process. "JSC CPC-R is a continuous-cycle enterprise, and the immediate suspension of its activities could entail irreversible consequences for the production process, and the emergence and development of an adverse and uncontrolled process at the technical facility, including its breakdown, since the technological requirements for oil transportation do not allow the immediate and simultaneous halting of production activities."
As previously reported, Rostransnadzor in May discovered several documentary violations by CPC as per the Oil Spill Response Plan, and subsequently demanded in court that the consortium suspend its activities in order to eliminate the violations.
"Despite the fact that the deadline for executing the order [on eliminating the violations] expires on November 30, 2022, the Southern Department of State Marine and River Oversight of Rostransnadzor applied to the Primorsky District Court of Novorossiysk, Krasnodar Territory, with the intention to suspend activities for 90 days, stating this directly at the hearing on July 5 2022. (...) By a court decision, (...) the requirements of Rostransnadzor were satisfied in part, with JSC CPC-R being imposed an administrative suspension of activities for 30 days," the consortium reported.
The consortium's press service reported that, "CPC meantime is currently working on eliminating the instances as identified during Rostransnadzor's inspection, and plans to do this as soon as possible."
The CPC pipeline is the main export route for Kazakh oil that accounts for more than 80% of the crude pumped by the pipeline. Following the completion of its expansion in 2018, the pipeline has capacity to pump 67 million tonnes of oil per year.
Amid the possible suspension of CPC activities, Kazakh President Kassym-Jomart Tokayev this week instructed KazMunayGas to work out the best options for implementing the Trans-Caspian International Transport Route in order to diversify supplies of Kazakh oil.
CPC's shareholders are Russia with 31%, as represented by Transneft with 24% and the CPC company with 7%; Kazakhstan with 20.75%, as represented by KazMunayGaz with 19% and Kazakhstan Pipeline Ventures LLC with 1.75%; Chevron Caspian Pipeline Consortium Company with 15%; Lukarco B.V. with 12.5%; Mobil Caspian Pipeline Company with 7.5%; Rosneft-Shell Caspian Ventures Limited with 7.5%; BG Overseas Holding Limited with 2%; Eni International N.A. N.V. with 2%; and Oryx Caspian Pipeline LLC with 1.75%.