Transneft: Contract with Azerbaijan not to be prolonged, because of oil transportation fees

In 2014 Azerbaijani gas will not be transported through Russia: Transneft company has announced temporary close-down of the pipe on the border with Azerbaijan, via which about 1.7 million tons must be transported in 2013,” writes Kommersant newspaper.

The talks on prolongation of the transit have failed. Azerbaijan exports oil via the Baku-Tbilisi-Ceyhan (BTC) pipeline, where the tariffs are much lower. “Transneft has lost 1-2 billion rubles of potential incomes. Rosneft company, which has discussed a reverse oil pumping from Russia, is also not in a hurry to fill the pipe as well.”

Dr. Demin told “Ъ” that the main reason why the contract with Azerbaijan will not be prolonged is the oil transportation tariff.

“We have informed them (SOCAR) about the tariffs depending on the volume of transportation, but we have received no proposals on the volumes,” he said.

According to these calculations, with the current volume of transportation of 1.5 million tons of oil a year the fee could be 720 rubles per 1 ton, with 1.8 million tons – 700 rubles and with 5 million tons – less than 400 rubles per 1 ton. Right now the fee is $16.00 per 1 ton (about 524 rubles at the current rate). There were no official talks after the proposal. According to the calculations of Transneft, in 2013 it received over $40 million less of profit from transportation of Azerbaijani oil. The main volume of Azerbaijani oil is exported via the Baku-Tbilisi-Ceyhan pipeline with the capacity of over 50 million tons a year, of which SOCAR pumps about 29 million tons.—0—