• Wednesday, 16 May, 2012

Lukoil to team up for new oil terminal

 25 March 2005 00:03 GMT

Russia's Lukoil has signed a deal with Arcticshelfneftegaz that might see the two companies team up to build an oil export terminal in the Barents Sea, writes Vladimir Afanasiev.
Lukoil said it is planning to build the Varandei terminal within the Medynsko-Varandeysky offshore block, in which Arcticshelfneftegaz is the licence holder.

The terminal will be able to load the company's future oil production, making development of the block commercially more attractive.

Lukoil general director Boris Kutychkin expects first oil to be shipped in 2009.

The terminal, a single anchor loading (SAL) system, is expected to be placed about five kilometres offshore and will be able to accept large oil tankers.

It will also load crude from onshore fields in the Timan-Pechora region developed jointly by Lukoil and ConocoPhillips.

The agreement is a sign that Lukoil is now prepared to consider Arcticshelfneftegaz as a serious business partner, according to industry observers.

Arcticshelfneftegaz is a 50:50 venture between private company Promyshlennye Investitsii and state-owned Arcticmorneftegazrazvedka.

Three years ago, Arcticmorneftegazrazvedka was at the centre of a controversy as it passed the development licences for the Medynsko-Varandeysky, Pomorsky and Kolokolmorsky offshore blocks to the newly created Arcticshelfneftegaz in exchange for investment guarantees from Promyshlennye Investitsii.

Little is still known about Promyshlennye Investitsii.

However, it has been suggested that the company is controlled by powerful Russian businessman Leonid Lebedev, who is also a member of the upper chamber of the Russian parliament.

Some media reports in 2002 suggested the transfer of the licences was an attempt to take away the state property, which was denied by Arcticmorneftegazrazvedka.

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