Tariff accord clears way for Russian exports via trans-Balkan pipeline

By the OGJ Online Staff
HOUSTON, Feb. 4 -- Ukraine's approval of a tariff accord could enable Russian oil to be exported by yearend via a trans-Balkan pipeline network to the Adriatic Sea.

The Centre for Global Energy Studies, London, in its FSU Pipeline Advisory Service, cited the Russian publication Commersant regarding the development.

CGES said Russia's AK Transneft and Yukos Oil Co. were anxious to have the projected completed by yearend.

Ukraine's parliament has ratified a 64¢/tonne/100 km tariff for Russian oil crossing its territory en route to Omisalj, Croatia. The action was regarded as the last major obstacle for exports.

Russian Urals blend would flow 1,987 miles west via the Druzhba and Adria pipeline systems. The final link would be the $120 million reversal of a 110.5-mile, 36-in. line from the inland terminal at Sisak, Croatia, to the port of Omisalj.

Capacity of the entire line would be 5 million tonnes/year (tpy), expandable to 10 million tpy after 5 years and 15 million tpy (300,000 b/d) after 10 years.

In April 2000, Ukrainian pipeline operator Druzhba agreed to cut its transit tariff to 64¢ from 72¢/tonne/100 km, bringing it in line with Belarus, Slovakia, Hungary, and Croatia, the other countries through which the route passes. But Ukraine's parliament held up approval until late last year.

The Omisalj oil terminal has two berths capable of handling 500,000 dwt tankers. CGES said the terminal has land available to add two berths and to build oil tanks to take storage capacity to 1.5 million cu m from the present 680,000 cu m.

CGES said use of larger tankers (VLCCs and ULCCs) to carry Russian crude would make exports more economic. Shipments from Russia's main southern port of Novorossiysk are limited to 150,000-dwt vessels by restrictions of Turkey's Bosporus Straits. Development of the Druzhba-Adria pipeline system will be the first complete pipeline bypass of the straits.

In theory at least, CGES said, the Druzhba-Adria connection could also be used to export Caspian-area crude if quality bank was used or crudes of differing qualities were batched to preserve their values.

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