Lukoil considers two options for Caspian oil transportation via Azerbaijan

Business Materials 6 October 2010 17:53 (UTC +04:00)

Azerbaijan, Baku, Oct. 6 / Trend E. Ismayilov /

Russian oil company Lukoil is considering at least four routes of oil transported from the Caspian fields under development, Dmitry Dolgov, the company spokesman, told Trend.

"We have at least four options for oil transportation from Caspian fields. These are the CPC (Caspian Pipeline Consortium), the Baku-Ceyhan pipeline, delivery to our Volgograd refinery and Baku-Novorossiysk," Dolgov said.

He said that the company is exploring all possible options, and is holding discussions with potential partners, in particular with "Transneft" (the operator of the Russian sector of the Baku-Novorossiysk oil pipeline), the CTC,and shareholders of the Baku-Tbilisi-Ceyhan oil pipeline.

At present, Lukoil is determining the route of delivery the first batch of oil from the Caspian Yuri Korchagin field. The first tanker must be shipped next week. However, none of the directions have been chosen.

"We expect the first shipment of oil tanker from the Yuri Korchagin field next week. We still have time to make a decision," Lukoil representative said.

A tanker with a deadweight of 8,000 tons was chartered for the first shipment of oil from the field.

Dolgov said that this route was chosen for the first shipment. But it does not mean that oil will continue to go through only this route.

"The reason is that conditions and conjuncture change. Then we can change the route depending on economic advantage," he said.

Regarding possible oil supplies through the Baku-Novorossiysk oil pipeline, the Lukoil representative said that the company will conduct direct negotiations with the JSC "Transneft" if this route is chosen. It will negotiate on this issue with Azerbaijan.

SOCAR transports oil from its own fields, as well as oil of joint ventures and the companies operating onshore Azerbaijan through Novorossiysk.

SOCAR senior representative said that Lukoil is interested in transporting oil through the Baku-Tbilisi-Ceyhan pipeline.

"At present, negotiations are underway," he said.

The Lukoil company representative did not comment on the possible purchase of equity in the Baku-Tbilisi-Ceyhan oil pipeline to reduce transportation tariffs.

At present, the oil from the block of Azeri-Chirag-Guneshli offshore fields in the Azerbaijani sector of the Caspian Sea is transported via the BTC pipeline. Small oil volumes from Turkmenistan were transported via this pipeline a few months ago.

The total length of BТС is 1.768 kilometers including a 443 kilometer section stretching via Azerbaijan, a 249 kilometer section via Georgia and a 1.076 kilometer via Turkey.

BTC Co. shareholders include BP (30.1 percent); AzBTC (25 percent); Chevron (8.90 percent); Statoil Hydro (8.71 percent); ТРАО (6.53 percent); Eni (5 percent ); Total (5 percent ); Itochu (3.40 percent ); Inpex (2.50 percent); ConocoPhillips (2.50 percent) and Amerada Hess (2.36 percent).