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Tuesday, 02 December, 2008, 22:10 GMT | more >>

Cut-throat Baltic pipe tariff


Russians look to undercut rival crude export routes



By Upstream staff 

The Russian Federal Energy Commission (FEK) has set unexpectedly low tariffs for the Baltic Pipeline System oil export route, which is due to be formally inaugurated on 25 December.

FEK, which is charged with establishing tariffs for Russian monopolies such as oil pipeline operator Transneft and gas giant Gazprom, declared today that oil producers will pay a total fee of $1.16 per barrel including the transhipment fee to tankers in the Baltic port of Primorsk.

This fee is less than half than the cost of alternative export routes to the ports of Ventspils and Butinge in the Baltic states of Latvia and Lithuania.

Russia has always argued against ceding oil transit revenues to these states following their post-Soviet rapprochement with Western countries and NATO.

The new pipeline has a capacity of 240,000 barrels per day and extends from northern Siberia to a terminal at Primorsk, 120 kilometres from St Petersburg.

However, local analysts say the tariff may be too low to recoup the $530 million investment Transneft has made on the first phase of the project.

The monopoly has already received government approval to spend another $200 million to expand capacity to 360,000 bpd.


Monday, 17 December, 2001, 16:20 GMT  | last updated: Tuesday, 03 May, 2005, 15:36 GMT

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