OREANDA-NEWS. January 11, 2013. TRANSNEFT JSC put into operation the second line of the East Siberia – Pacific Ocean pipeline (ESPO-2), which shall allow increase of the system’s total capacity.

Vladimir Putin, the President of the Russian Federation, took part in the ceremony of the system’s commissioning in a mode of a videoconference. The President of our country noted that this project “significantly broadens the infrastructural possibilities of the regions of Far East of Russia”. “Our partners from such countries as Japan, USA, Indonesia, South Korea, Singapore, the Philippines, Taiwan, Malaysia bought our product. Also, a new blend of oil appeared, which is entitled precisely “East Siberia – Pacific Ocean” at the international market. Having terminated building of the second part, the possibilities became much more broadened, and the total capacity may increase from 30 to 45 million tons of oil annually, and this is a significant event”, V. Putin said.

N. Tokarev, the Head of TRANSNEFT, noted that with putting ESPO-2 into operation “the building of an integrated oil pipeline system from the Baltic to the Pacific Ocean is finished”. According to him, “the American market gets about 35 per cent of oil through Koz’mino port, the final destination point of ESPO; Japan gets about 30 per cent; China gets 25-28 per cent. And the rest part goes to Singapore, Malaysia and South Korea”. “I believe such proportions shall be preserved”, he noted. According to N. Tokarev, to make oil delivered by ESPO a marker grade, it is necessary to increase the volume of delivery up to 30 million tons by this very pipeline. “If we can manage to do so in the nearest term, we can confidently say that a new grade of oil shall appear in the world. And we can be really proud of this sort of oil”, the Head of the pipeline company reported. “5 thousand km of the linear pipeline, 20 oil pumping stations, thousands kilometers of power transmission lines and roads have been built, 43 billion RUR have been allocated to the budgets of the regions for the last seven years”, N. Tokarev added.

The ESPO project is meant for transportation of oil to Russian oil processing plants, as well as to the countries of Asia-Pacific Region. The first line of the system was put into operation in the end of December 2009. A sector Taishet – Skovorodino and Koz’mino oil loading terminal at the coast of the Pacific Ocean were built at the first stage of the project. But oil was transported from Skovorodino to the port by railway. During the second stage of the project, an oil pipeline sector from Skovorodino to Koz’mino port was built and the capacity of the marine terminal was increased. ESPO-2’s putting into operation will allow increase of the volume of oil dispatched from Koz’mino twice, up to 30 million tons per year. The volume of oil exported from Koz’mino port may reach 15,6-16 million tons in the year 2012, and 21 million tons in the year 2013. Considering the route to China (15 million tons of oil per year), 36 million tons are to be pumped in 2013. Handling through Koz’mino may amount 24-25 million tons in 2014, and 30 million tons in 2015. N. Tokarev reported that oil delivery to Koz’mino by railway still remain in the near term and shall amount about 3-4 million tons per year.

The Head of the Company emphasised that Koz’mino port has enough capacities to secure oil deliveries to the partners from the countries of the Asia-Pacific Region. “It’s vital that Russian manufacturers should increase volumes, and TRANSNEFT should increase capacities, and we do exactly so. The second mooring has been put into operation to date, and it allows filling tankers of 120 thousand tons deadweight, the first mooring can accept tankers of 100 thousand tons deadweight. The oil tank farm was increased up to 30 million tons, that is why we have significantly strengthened out potential in Koz’mino in a couple of years. That means a buyer is able to buy any volume he needs”, N. Tokarev said. He specified, that the market of the Asia-Pacific Region is rather capacious. For example, about 20 million tons of oil was dispatched to China in the previous year, 15 million tons of them – by the pipe through Skovorodino, and 4 million tons – through Koz’mino. At that, N. Tokarev noticed that TRANSNEFT considers the offer regarding transit of Russian oil to China by “Atasu – Alashan’kou” Kazakhstani oil pipeline system economically unprofitable. “We do not favour this initiative, because such transfer of oil to China through Kazakhstan will result in significant expenses for TRANSNEFT. We loose our net proceeds. This is about 1.5 billion USD of losses for such a transit. This money falls out from the budget”, N. Tokarev said. According to him, the transit of oil in such a direction can be realized provided full compensation into the budget of the funds fallen out. “After solving the question with the compensations, the whole question will be solved”, N. Tokarev remarked. He emphasized that ROSNEFT hasn’t applied to TRANSNEFT with an appeal to organize oil pumping in this direction yet. “We know that such plans do exist, but we were not addressed with this question yet”, the President of TRANSNEFT said.

Also, N. Tokarev informed that Khabarovsky oil processing plant would get oil from the ESPO system in the year 2014, and Komsomol’sky oil processing plant – in the year 2015. “Khabarovsky oil processing plant will be the first plant that will get oil of high quality, because this plant was the first to begin its own modernization and implementation technologies that lower the impurity content. And exactly this plant has allocated funds into the infrastructure to feed oil from ESPO to the plant”, - N. Tokarev said. He noticed that the plant in Komsomol’sk-na-Amure is being in the stage of modernization now. Besides, to feed oil there, it’s necessary to build a tapping from ESPO of 300 km length. Until its commissioning, oil will be delivered by railway there. This plant belongs to ROSNEFT Company, and we have agreed with ROSNEFT on a parity – to co-finance the building for the account of an agreed tariff, which had been established specially for them. That means that we build, and they compensate funds to us by means of payments as per special tariffs”, he said. According to N. Tokarev, design and survey works regarding the route of the tapping have already began to date. The President of the Company noticed that availability of oil resources in the region can facilitate lowering of prices (which are considered among the highest prices in the Russian Federation) for oil products in that region. “Oil delivered by pipe is cheaper than oil carried by wheel transport, and this is one of the reasons why we may hope prices be lowered. We are not oil processors, and we cannot confidentially say about price lowering. But availability of oil resources in the region is an apparent attribute of the fact that prices are to be clear and justified,” – the Head of TRANSNEFT reported.