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Friday, 09 January, 2009, 14:20 GMT | more >>

Lukoil seeks Siberian oil outlet



By Upstream staff 

Russia's top oil company Lukoil may build new terminals on Russia's or Norway's Barents Sea coast to ease exports from its joint venture with US supermajor ConocoPhillips, industry sources said.

The venture plans to produce 240,000 barrels per day in Russia's north by the end of this decade and is already building a terminal of the same size in the Arctic port of Varandei, Reuters reported.

But as shallow Varandei can load only tankers with a maximum deadweight of 70,000 tonnes the venture needs a bigger outlet to ship volumes across the Atlantic or to Asia.

"Lukoil wanted to install a floating storage tank or build a terminal in the region of Murmansk, but it was turned down by local officials. Now Lukoil is mulling a terminal in Norway, which has floated the idea," said a market source, familiar with LUKOIL's plans.

Lukoil's spokesman Dmitry Dolgov declined to comment.

The source said the new outlet could be located in the north-east of Norway and have a similar capacity to Varandei but would be able to load crude carriers with a deadweight of up to 300,000 tonnes.

The head of economic department at Murmansk's regional administration, Viktor Gorbunov, told Reuters Lukoil's and Conoco's request for a storage tank in the port was turned down for environmental reasons.

But he said the companues could still join rival projects by diversified company Sintez or by Murmansk Sea Shipping.

Murmansk, which has no oil pipeline link with central Russia, has become an important export outlet for Russian crude and products in recent years after state oil firm Rosneft installed a floating storage tank, known as Belokamenka, near the port. It exports 80,000 bpd of oil from Rosneft and Lukoil.

Trading companies Tangra Oil and Progetra also ship fuel oil and other products from Murmansk to north-west Europe. All volumes come by rail.

Sintez wants to build a 500,000 bpd crude and products outlet by 2008, while the size of the Murmansk Sea Shipping's outlet is not known.

"The shipper is currently working together with Lukoil on a proposal to build an onshore terminal for both Varandei and Prirazlomnoye. We are studying this project but it is not fully ready yet," said Gorbunov.

Prirazlomnoye on the Kara Sea belongs to gas monopoly Gazprom and is due on stream later this decade.

Gorbunov said the regional administration believed the project by Sintez, which it supports, would be the best pick for Lukoil: "It is a serious project, they have their own volumes. They will rely on supplies by rail, but are also counting on volumes, which would come from the sea."

But a source close to Lukoil said the energy company was not interested: "If we cannot build our own terminal on the Kola peninsula, why would we need Sintez. We would rather go to Norway, which has invited us."

Lukoil has already its own terminals on the Baltic Sea, in Vysotsk and Kaliningrad, and has said it wanted to build more to boost shipments to the US, where it has about 2000 filling stations.

Wednesday, 12 July, 2006, 16:20 GMT  | last updated: Wednesday, 12 July, 2006, 16:20 GMT

Cold shoulder: Officials in Murmansk turned down Lukoil's request to build a dedicated LNG export terminal near the Arctic port.
 

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