TNK-BP Will Send Its First Tanker with ESPO Oil on January 1–2

December 25, 2009, Friday


The Russian-British company TNK-BP will send its first tanker with oil of the ESPO (East Siberia–Pacific Ocean) grade from the new seaport Kozmino, the terminal point of the East Siberia–Pacific Ocean oil pipeline, on January 1–2, 2010, the press service of the company informed.

TNK-BP sold 100,000 tons of ESPO oil to Trafigura, one of the largest international traders, which, according to reports, offered the highest current price for this oil grade. The price offered by Trafigura was higher than the price of the first lot of oil sold from the Kozmino seaport in late December 2009, which was equal to the Dubai oil price plus 50 cents.

In Q1 2010, TNK-BP is going to sell 500,000 tons of ESPO oil from the Kozmino seaport.

Despite the fact that oil from the Verkhnechonskoe field is supplied to the East Siberia–Pacific Ocean oil pipeline, TNK-BP, according to the press service, will not be holding tenders for selling ESPO oil because of the lack of proper specifications for this oil at the Kozmino seaport and the lack of experience with this oil grade.

“Tenders are efficient in liquid markets with well-known commodities. ESPO crude has not yet reached a sufficient level of market penetration to make tenders efficient. Together with other oil companies supplying oil to Kozmino, we are studying this oil grade and trying to promote its penetration to the market. This will help us understand how to sell this crude oil grade better and eventually increase the number of its buyers. We would like to ensure smooth logistics in supplies of ESPO oil prior to committing to any long term deals” said Jonathan Kollek, Vice President, Sales, Trading and Logistics, TNK-BP.

First ESPO oil will reportedly be exported by Rosneft to the Finnish company IPP. 100,000 tons of crude will be offloaded into a tanker on December 27–29. Rosneft informed that the price of ESPO oil for pilot sales will be formed as the price of Dubai oil in the month of supply plus the premium (discount) offered to tender participants. Based on the oil prices in November 2009, the buyer’s premium to the seller’s price of Brent oil for IPP Oy will be $1.7 per barrel.

Currently, ESPO oil is transported through the first line of the East Siberia–Pacific Ocean trunk oil pipeline, which was out into operation in November 2009, to the Skovorodino railway station and then by rail to the Kozmino seaport.

Pipeline fill is now used by Transneft for test operation of the first line of the East Siberia–Pacific Ocean trunk oil pipeline.

The specialized oil—loading seaport Kozmino near the town of Nakhodka is the terminal point of the future East Siberia–Pacific Ocean pipeline system. This system of oil pipelines is being constructed for supplying Russian oil to countries of the Asia-Pacific region. The throughput capacity of the first line of this system will be 40 million tons and that of the second line 50 million tons.

At the first stage, Siberian oil from the accumulation complex in Skovorodino, Amursk Oblast, will be supplied by rail to Primorsky Krai and then exported in tankers to countries of the Asia-Pacific region. At the second stage, an oil pipeline from Skovorodino to the Kuzmino Bay will be constructed in the East Siberia–Pacific Ocean pipeline system. After completion of the second line, the throughput capacity of the oil pipeline will increase up to 80 million tons.

Andrei Belyaminov, Head of the Federal Customs Service of the Russian Federation, said earlier that clearance of the first tanker with East-Siberian oil to be exported with zero duties is scheduled for December 28–29. After the February meeting presided by Vladimir Putin, Prime Minister of the Russian Federation, the Russian authorities decided to reduce the export duties for oil from East-Siberian fields to zero in order to stimulate subsoil development in this region, which is the resource base for filling the strategically important East Siberia–Pacific Ocean system of oil pipelines.

Beginning from December 1, 2009, the export duties for oil from 13 strategic fields in East Siberia – Vankorskoe, Yurubcheno-Tokhomskoe, Talakanskoe (with its Eastern block), Alinskoe, Srednebotuobinskoe, Dulismonskoe, Verkhnechonskoe, Kuyumbinskoe, Severo-Talakanskoe, Vostochno-Alinskoe, Verkhnepeleduiskoe, Pilyudinskoe, and Stanakhskoe fields will be set to zero. The Ministry of Energy of the Russian Federation stated that these zero duties will remain in force for five–seven years. The number of fields with zero export duties may be increased.

Source: RIA Novosti

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