Transneft: SOCAR not interested in pumping oil via Baku-Novorossisk pipeline at commercial rates

 Transneft company has been working to temporary close down section of the Baku-Novorossiysk oil pipeline (Makhachkala-Baku) as Azerbaijan did not express any interest to sign a commercial agreement on the oil transit, ITAR-TACC quoted Transneft’s official representative Igor Demin as saying. 

He said SOCAR’s representatives did not start official talks on the commercial agreement on the Azerbaijani oil transit via Russia after termination of the intergovernmental agreement between Russia and Azerbaijan in May 2013, which was used as a basis for the transit agreement. 

All Transneft’s obligations on the Azerbaijani oil transit will expire in early February 2014 and the Russian company is ready to temporarily close down the unused section Makhachkala-Baku by injecting a rare gas into the pipe, Demin explained. Transneft’s representative added that the section from Makhachkala to Novorossiysk will be still used for transportation of oil to the port in the capital of Dagestan. 

On  May 14, 2013 Russian media reported that Russian Premier Dmitri Medvedev signed the resolution on May 5, 2013 to terminate the agreement between Russia and Azerbaijan on Azerbaijani oil transit through Russia using the Baku-Novorossiysk pipeline.

Russian Foreign Ministry has been instructed to notify Azerbaijan about termination of the agreement and suspension of Azerbaijani oil pumping via the pipeline. The intergovernmental agreement concluded in 1996 envisages annual transit of 5 million tons of Azerbaijani oil at the price of $15.67 per ton.

* During 2013 SOCAR exported 1,751,000 tons of oil via the Baku-Novorossiysk pipeline, down 313,000 tons against 2012. Export of Azerbaijani oil via the northern route started on October 25, 1997. Since that time Azerbaijani oil transit fees did not change - $15.67 per 1 ton. Last summer representatives of Transneft company asked about $35 per transition of 1 ton of Azerbaijani oil via Russia. This proposal did not suit the Azerbaijani company.—0—