Azerbaijan to reorient oil transportation from Northern to Western direction

Oil&Gas Materials 22 November 2013 19:57 (UTC +04:00)

Baku, Azerbaijan, Nov. 22
By Emil Ismayilov - Trend:

The oil that was considered to be transported through Baku-Novorossiysk pipeline will be exported via Baku-Tbilisi-Ceyhan oil pipeline, a source at State Oil Company of Azerbaijan (SOCAR) told Trend on Nov.22.

According to the prognosis, oil transportation via Baku-Novorossiysk pipeline is not planned for 2014. The oil that was planned to be transported in a northerly direction is likely will be directed to Baku-Tbilisi-Ceyhan, the source said.

Currently the oil is exported from Azerbaijan via three oil pipelines: Baku-Tbilisi-Ceyhan, Baku-Supsa and Baku-Novorossiysk, as well as a railway. Thus, in the case of refusal to transport oil via Baku-Novorossiysk pipeline, it can be directed to two other oil pipelines.

"It is not planned to transport oil via Baku-Novorossiysk pipeline from January 1, 2014 and it is planned to transport this oil through Baku-Tbilisi-Ceyhan pipeline," the source said.

Baku-Novorossiysk pipeline transports the oil produced by SOCAR independently, as well as from onshore fields developed within joint enterprises.

Earlier, SOCAR Vice-President for Refining, David Mammadov said that in 2014, SOCAR will direct all of the oil produced at its fields for processing. The increase in processing is due to a significant increase in gasoline consumption in the domestic market. The growth in gasoline consumption this year constituted 10.2 percent. The increase in gasoline production is possible with large amounts of oil. Accordingly, in 2014, SOCAR plans to direct all of its oil for processing. Only part of the oil produced by joint ventures at onshore fields will be exported.

Earlier the Russian side decided to terminate the intergovernmental agreement on the supply of oil via the Baku-Novorossiysk pipeline. However, there is possibility for further negotiations with the Russian side on the work of the pipeline.

In May, the Russian Prime Minister, Dmitry Medvedev signed a decree terminating the agreement with Azerbaijan on the transit of Azerbaijani oil via the Baku-Novorossiysk pipeline.