Transportation via Baku-Novorossisk pipeline goes down every month

Azerbaijan transports less oil via the northern route Baku-Novorossiysk.

State Oil Company of Azerbaijan (SOCAR) said that from January to August 1,164,695 tons of Azerbaijani oil was shipped from the Novorossiysk port. Export of Azerbaijani oil via the northern routed decreased by 8.6% against the same period last year.

In August 2013 SOCAR shipped 169,706 tons of Azerbaijani oil from the Novorossiysk port.

On May 5, 2013 Russian Premier Dmitrii Medvedev signed a decree to terminate the Russian-Azerbaijani intergovernmental agreement on transit of Azerbaijani oil via Russia, which was signed on January 18, 1996 in Moscow, since January 1, 2014. According to the decree, in order to continue transportation of Azerbaijani oil via Russia, SOCAR and Russian Transneft company must negotiate new commercial conditions and sign a new contract till January 1, 2014, otherwise SOCAR's oil export will be suspended. At present fee for transportation of Azerbaijani oil via Russia is $15.67 per ton. Russia insists in doubling the fee.

However, during Russian President Vladimir Putin's visit to Baku in August 2013 the energy cooperation issues have been discussed. Azerbaijan has offered to use the Baku-Novorossiysk pipeline in reverse. SOCAR and Rosneft state-run companies have conducted initial talks. It is planned to transport 5 million tons of Russian oil to Baku. Part of this oil is planned to be refined at Baku's oil refineries and part will be pumped to the Baku-Tbilisi-Ceyhan oil pipeline. The last transaction between the companies will be based on the swap contract. This means that Rosneft will pump oil to SOCAR on the Russian-Azerbaijani border and then receive it in Europe.

At present the companies' expert study the commercial details of the proposed variants.

* In 2012 SOCAR exported 2,000,064 tons of oil via the Baku-Novorossiysk oil pipeline.-0-