SOCAR resumes oil exports via Baku-Novorossiysk

Baku, Azerbaijan, March 4

By Emil Ismayilov - Trend:

The State Oil Company of Azerbaijan Republic (SOCAR) has resumed pumping its own oil via the Baku-Novorossiysk, a source at SOCAR told Trend on March 4.

Pumping of Azerbaijani oil via Baku-Novorossiysk pipeline stopped in February and the volume of oil transported on that route was sent to the Baku -Tbilisi-Ceyhan oil pipeline where the majority of Azerbaijani oil is exported from the Azeri-Chirag-Guneshli fields' block.

However, SOCAR and Russian Transneft have recently signed a new agreement on oil transportation via Baku-Novorossiysk for one year.

Despite the recent commercial agreement, SOCAR will continue pumping its own oil via the Baku-Tbilisi-Ceyhan oil pipeline.

As the source said, pumping of SOCAR oil provided for export via the northern route - Baku-Novorossiysk via Baku-Novorossiysk and BTC will be alternated, according to the schedule.

"At present, oil pumping is conducted via Baku-Novorossiyk, but this process will be alternated. This means that in the period of pumping oil through one of those pipelines, pumping will not be carried out through the second one," the source said.

As Trend reported previously, before late 2014 the pumping in both directions will stand at 1.55 million tons; 1.02 million tons of which will account for the Baku-Novorossiysk pipeline and 530,000 tons for the Baku-Tbilisi-Ceyhan (BTC) oil pipeline.

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

In 2013, SOCAR exported 1.75 million tons of oil via the northern Baku-Novorossiysk pipeline against 2.06 million tons in 2012.

However, earlier the Russian side decided to terminate the intergovernmental agreement on the supply of oil via the Baku-Novorossiysk pipeline.

Nevertheless, it was stated that there was an opportunity for further negotiations with the Russian side on the work of this pipeline and in particular in the opposite direction.

It was reported that in case of no agreement, annually about two million tons of oil would be pumped via the Baku-Tbilisi-Ceyhan oil pipeline. This oil was transported by SOCAR annually via the Baku-Novorossiysk pipeline. The company also has prospective opportunities for transporting up to five million tons of additional volumes of oil via the Baku-Tbilisi-Ceyhan oil pipeline.

It was assumed that if no agreement is reached, the BTC will pump an annual two million tons of oil which SOCAR annually transported via the Baku-Novorossiysk pipeline. Furthermore, in the future, the company has the capacity to transport via the BTC up to five million tons of additional oil.

SOCAR has been operating the Baku-Novorossiysk oil pipeline since 2008. The company took over the operation from the Azerbaijan International Operating Company (AIOC - headed by BP).

The Baku-Novorossiysk pipeline is 1,147 kilometres long. The length of its Azerbaijani section is 231 kilometres and Russian section 916 kilometres. It has a diameter of 720 millimetres.

SOCAR said the pipeline was filled with oil in October, 1996. Its maximum capacity stands at 105,000 barrels per day.

Before the suspension of oil pumping through the Baku-Novorossiysk pipeline, the tariff for transportation of oil via this pipeline was $15.67 per ton.

There is no data regarding the tariff for oil pumping through Baku-Novorossiysk after the signing of a new commercial agreement between SOCAR and Transneft.

The construction of the Baku - Tbilisi - Ceyhan pipeline started in April 2003 and was flowing with oil on May 18th 2005. Shareholders of Baku - Tbilisi - Ceyhan are BP (30.1 percent), AzBTC (25 percent), Chevron (8.9 percent), Statoil (8.71 percent), TPAO (6.53 percent), Eni (5 percent), Total (five percent), Itochu (3.40 percent), Inpex (2.5 percent), ConocoPhillips (2.50 percent) and ONGC (2.36 percent).

Translated by S.I.
Edited by S.M.

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