Azeri Socar redirects crude flows from Novorossiisk route to BTC

Time:2014-02-19 Browse:52 Author:RISINGSUN
Azerbaijan`s state oil company Socar has redirected to the Baku-Tbilisi-Cheyhan line the crude volumes it earlier shipped to the Russian Black Sea port of Novorossiisk, as it has so far not reached a deal with Russia on resuming the use of the Black Sea route, Socar said in a statement.


"On February 15, Socar started transportation of its own crude oil through the Baku-Tbilisi-Cheyhan route," the statement, released late Monday, said.


"Currently, negotiations are ongoing with Russia`s [national oil pipeline operator] Transneft for continuation of oil shipments via the Baku-Novorossiisk line," it said.


Socar was unavailable for further comment when contacted by Platts Tuesday.


Socar used to ship crude it produces from its own fields via the 8 million mt/year (160,000 b/d) Baku-Novorossiisk line under a long-term agreement with Transneft.


The deal, under which the Azeri crude shipments had to stand at 5 million mt/year, expired on February 7.


Earlier, Socar indicated it was not planning to extend the agreement and considered processing the crude volumes at domestic refineries, according to local media reports.


Should the agreement not to be extended, the Baku-Novorossiisk line would be shut, Transneft said earlier. The Russian oil pipeline operator complained Socar was shipping far less than the agreed volumes via the route, making maintenance of the line economically unattractive.


In 2013, only 1.750 million mt of Azeri crude was actually shipped via Baku-Novorossiisk, according to Transneft.


Unexpectedly, on February 7, Socar launched talks to extend the agreement, a spokesman for Transneft said last week.


Socar already uses the 1 million b/d Baku-Tbilisi-Cheyhan line to ship crude volumes produced at the BP-operated Azeri-Chirag-Gunesli field as well as condensate from the BP-operated Shah Deniz gas field.


The line also ships volumes of Turkmen oil delivered across the Caspian sea by tanker and has carried smaller volumes of Kazakh oil.


In 2013, crude shipments via Baku-Tbilisi-Cheyhan reached 29.7 million mt, or an average of 594,000 b/d, Socar said in early January.