Azerbaijan, Russia finalise amendments to Baku-Novorossiysk pipeline agreement
Azerbaijan, Baku, Feb. 29 / Trend E.Ismayilov /
Azerbaijan and Russia have almost completed the preparation of amendments to an agreement on oil transportation relating to the Baku - Novorossiysk pipeline, Azerbaijani Industry and Energy Minister Natiq Aliyev said at a meeting with members of the Caspian-European Integration Business Club (CEIBC) on Wednesday.
Changes to the agreement envisage the possibility for third parties' transportation of oil through this pipeline, as well as a tariff reduction, depending on the increase d level of pumping, Mr Aliyev said.
The minister did not specify the time frame for approval of changes to the agreement.
In September, 2011 talks were held in Baku on amendments to the intergovernmental agreement dated January 18, 1996 for transportation of Azerbaijani oil via Russia.
To date, the agreement between Azerbaijan and Russia on oil transportation negotiates clearly states the fact that the Baku-Novorossiisk oil pipeline can only transport oil of Azerbaijani origin. Cancellation of this paragraph will make it possible to transport oil of other countries such as Kazakhstan or Turkmenistan, currently passing through Azerbaijan.
"Today the cost of pumping a ton of oil from the Azerbaijani-Russian border to the tanker is $15.67 dollars per ton. However, we are working to determine the amount which will then see the tariff going down. This will increase the volume of oil transportation," Mr Aliyev said earlier.
The bilateral Russian-Azerbaijani inter-governmental agreement on the transit of Azerbaijani oil via Baku-Novorossiysk pipeline signed in 1998 provides for the transportation of five million tons a year at the rate of $15.67 for the transit of one ton of oil.
SOCAR ships through Novorossiysk oil from its own fields, as well as oil of joint ventures and operating companies working on Azerbaijan's onshore.
In 2012, SOCAR plans to pump 1.7 million tons of oil using the Baku-Novorossiysk against two million tons in 2011. The decline in oil pumping accounts for an increase in consumption of oil products in the country and as a consequence, the growth of recycling in local refineries.
In 2008 SOCAR exported 1.2 million tons of oil using Baku-Novorossiysk. In 2007 about 1.2 million tons of oil was exported via this route which is the same as in 2006. Exports via Baku-Novorossiysk amounted to 1.6 million tons in 2005.
The operator of Baku-Novorossiysk pipeline before the end of 2007 was the AIOC, which transferred these functions to SOCAR.