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Friday, August 11, 2006

Transneft borrows to build new pipeline

08-11-2006 RBC News - Sberbank of Russia says it has signed a credit agreement with the Transneft oil pipeline monopoly. The framework credit facility includes a six-year revolving credit line of RUR 65 billion ($2.43 billion at today's exchange rate) and a non-revolving credit line of RUR 20 billion (about $748 million). The deal was signed on 7 August. The money will be used to finance the first stage of the East Siberia-Pacific Ocean pipeline project. The project envisages the construction of a single oil pipeline system from Taishet in the Irkutsk region through Skovorodino in the Amur region to the Pacific Ocean. The capacity of the pipeline will be 80 million tonnes of oil. The project will be implemented in two stages. During the first stage, an oil pipeline will be built from Taishet to Skovorodino, with a capacity of 30 million tonnes of oil a year, and an oil terminal will be constructed in the Primorsk region on the Pacific coast. The first stage of the project is scheduled to be completed in the second half of 2008. In the second stage, a pipeline will be built between Skovorodino and Perevoznaya Bay in the Primorsky region on the Pacific coast. It will have a throughput capacity of 50 million tonnes of oil a year. The second phase of the project is expected to be completed in 2015. The construction of the oil pipeline began at the end of April in Taishet (Irkutsk region). Several kilometers of pipes have been laid, and 67km of pipe products have been delivered to Taishet. The pipeline is being built at a speed of between 200 and 300 meters a day. Initially, the pipeline was supposed to go along Lake Baikal. But in April Russian President Putin asked Transneft to lay the pipeline as far from the lake as possible. The new route runs 400km away from the lake, increasing the length of the pipeline by 370km. Japan expressed interest in the project and asked for state guarantees from President Putin but he said that this was a commercial project and no state guarantees could be given. Vneshtorgbank also wanted to take part in the project. Vneshtorgbank President Andrei Kostin said the bank was one of few banks capable of financing projects valued above $1 billion. "We are prepared to take part in this project, in one way or another," Kostin said. Experts say the construction of the East Siberia-Pacific Ocean pipeline will open new markets for Russia, and give a new impetus for the development of East Siberia and the Far East. Transneft's authorized capital of RUR 6.2195 million is divided into 4.6646 million ordinary and 1.555 million preference shares with a nominal value of RUR 1. Transneft is fully owned by the government. The Federal Agency for Management of Federal Property has 75 percent of the company's voting shares, and private shareholders have 25 percent of preference shares.

Tuesday, August 08, 2006

Russian Oil May Bypass the Bosporus

07-31-2006 - by Denis Rebrov -Kommersant. [To see a map, move your mouse over the image]
TNK-BP is studying new routes for pipeline
Construction of the oil pipeline from Burgas, Bulgaria, to the Greek city of Alexandroupolis has come into question. TNK-BP, the coordinator of the project, is examining investment conditions for an alternative line in Turkey that would lead from Samsun to Ceyhan. The company says that the final choice has yet to be made, but it is economically feasible to build only one of the pipelines. The Turkish newspaper Sabah reported last week that TNK-BP board members told local authorities that they wanted a share in the operating company for the Samsun-Ceyhan pipeline equal to the shares of the other investors, the Italian company Eni and the Turkish Calik Group. According to that newspaper, negotiations are already underway with Calik Group. TNK-BP declined to comment on that information, but reported that the company is considering various possibilities and has not yet rejected the construction of a Burgas-Alexandroupolis pipeline. "Oil production in Kazakhstan will grow and, naturally, the load on Russian tankers in the straits [the Bosporus and Dardanelles] will increase as well, naturally," a TNK-BP source explained. "As a result, Russian tankers will wait longer before entering the Mediterranean Sea. TNK-BP spokesmen said that the company was considering several pipeline routes and would possibly form a consortium with Rosneft and Gazprom Neft, which planned to participate in the Burgas-Alexandroupolis line. Those companies declined to comment on that information.
The idea of building a pipeline from Samsun to Ceyhan was first brought up in the early 1990s. That pipeline would stretch 550 km. and have a planned capacity of 50 million metric tons of oil per year, which could be raised to 70 million tons. The cost would be $1.5-2 billion. That is but one of ten routes being considered to bypass the Turkish straits. The Burgas-Alexandroupolis route has been under consideration for ten years. Russia, Bulgaria and Greece signed a memorandum on the implementation of that project in the spring of last year, however, there is still no technical plan for it. All that is known is that its capacity would be 35-50 million tons of oil per year and no agreements have been reached with the countries that pipeline would pass through on transit and pumping fees. The Turkish pipeline would offer the advantage of lower political risks, sine the pipeline would not cross any national borders.

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