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SOCAR: tariffs on Baku-Novorossiysk can reduce

Oil&Gas Materials 3 June 2009 17:51 (UTC +04:00)

Azerbaijan, Baku, June 3 / Trend , E. Ismayilov/ SOCAR is studying proposals submitted by Russia to reconsider terms of transport of Azerbaijani oil via Baku- Novorossiysk, senior SOCAR official said.

"Given reduced oil prices, we examine these proposals. But we think that tariffs can be only reduced. But we do not do this because we think that inter-governmental agreement signed in 1996 meets interests of both parties," he said.

None of the sides incur big damage because of this agreement. The inter-governmental agreement includes obligation of both parties and transport tariffs, he said.

SOCAR is considering Russian proposals because the company has its counter-proposals, which the company will make in the case to satisfy Russian side. SOCAR's proposals will lead to greater commercial attractiveness of pipeline for SOCAR. In particular, this concerns the establishment of the quality bank of Azerbaijani oil in the Novorossiysk port, the SOCAR representative said.

Coordinated volumes of oil to be transported via Baku-Novorossiysk are 2.5 million tons. Agreement of 1996 envisaged transport of up to 5 million tons of oil via this route.

The length of Baku-Novorossiysk is more than 800 kilometers. The capacity is about five million tons per year.

The operator of the pipeline was Azerbaijan International Operating Company till end of 2007 which handed it over to SOCAR later. AIOC partners were not going to transport oil via this route in the future. However, because of the events in Georgia in August of last year and suspension of Baku - Tbilisi - Ceyhan oil pipeline in the same period, AIOC partners (participants of Baku - Tbilisi - Ceyhan project) had to resume the exports via this route.

Azerbaijan gets Urals oil mixed with oil of other producers from the Novorossiysk port. Russia can consider issue of creating quality bank in Novorossiysk once Azerbaijan ups gas transport via this pipeline.

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