The Caspian Pipeline Consortium (CPC) has partially resumed loading oil into tankers after operations were abruptly interrupted earlier last week at a marine terminal near the Russian Black Sea port of Novorossiysk.
The CPC, which operates a major oil pipeline from Kazakhstan to the marine terminal near Novorossiysk, announced the resumption of operations with one of three marine loading buoys at the terminal but did not reveal the anticipated rate of tanker shipments as it continues to address the damage done to the other two single point mooring systems serving the terminal.
The loading buoys were damaged during a severe storm that hit the Russian Black Sea coast near Novorossiysk on 19 and 20 March.
Following the storm, CPC said its three loading buoys would require extensive inspection before operations could resume safely.
The operator said at the end of the last week that the first loading buoy — SPM-1 — passed the safety inspection, though two others will require the offloading hoses to be replaced they can resume operations. "Repairs may take between three to four weeks", the company said.
CPC said it has issues in securing replacement parts for the buoys from Western suppliers and making a reserve of parts to deal with any similar accidents in the future, but did not refer specifically to Western sanctions on Russia following its invasion of Ukraine as a reason.
The Caspian Pipeline is a key outlet for Kazakh and some Russian oil to international markets and carried close to 1.4 million barrels per day of crude before the stoppage.
According to marine traffic websites, SPM-1 completed its first loading after resuming operations on 25 March, sending an estimated 1.1 million barrel cargo onboard the crude oil tanker Seavoyager.
Another tanker with similar carrying capacity, Nissos Tinos, left the SPM-1 loading buoy on 26 March, while a third — Christina — was being loaded at the time of writing.
The resumption of oil loading operations at SPM-1 has helped ease concerns in Kazakhstan that production at three Western-led major oil developments — Tengiz, Kashagan and Karachaganak — may have to be curtailed, with the country failing to receive hundreds of million of US dollars in export proceeds.
The Kazakh Association of Oilfield Service Companies (KazEnergy), estimated the country’s budget may forfeit revenues of close to 500 billion Tenge (over $1 billion) if repairs at the loading buoys near Novorossiysk continue for two months.
Kazakhstan’s Applied Economics Research Centre said the country has the limited options to increase oil exports via other routes.
It said there is some spare capacity in pipeline routes running across Russia and China, but a sizeable increase in cross-Caspian tanker shipments to carry Kazakh oil to Baku in Azerbaijan to gain access to the Baku-Tbilisi-Ceyhan export trunkline is not possible unless infrastructure is upgraded Kazakhstan’s Caspian port of Aktau.
In the most optimistic scenario, diverting oil from the Caspian Pipeline to alternative routes will still leave about 350,000 bpd of oil production stranded in the country, according to the centre.
Though the closure of the Caspian Pipeline and a Houthi attack on Saudi Arabian oil installations drove international oil prices higher at the end of last week, prices have eased on Monday with increased US oil exports to global markets.
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