Espo Rail Tariff to Be $25 Per Tonne – Transneft Chief

MOSCOW. March 13 (Interfax) – The rail tariff to transport oil from Skovorodino to Kozmino Bay, along the route of the second phase of the Eastern Siberia-Pacific Ocean pipeline, will amount to $25 per tonne, Transneft President Semyon Vainshtok said in an interview with the newspaper Komemersant.

“We have worked with rail companies and have received a letter from them in which they have set down their tariff: $25 per tonne from Skovorodino to Kozmino. This fits in with our plans,” Vainshtok said.

Vainshtok said that Transneft (RTS: TRNF) is not yet able to forecast a tariff for the Eastern Siberia-Pacific Ocean pipeline, based on the fact that expenditure on the first section will amount to $11 billion. “Because we assume that a network tariff will be introduced, that will to all intents and purposes change the entire Transneft tariff policy. It will repeat the tariff formation mechanism of the rail companies; the further the freight is transported, the cheaper it will be. Therefore, in the end it will be all the same to oil companies to export oil from Novorossiisk, Skovorodino or Kozmino. Western Siberia is being considered as the base region and it should be profitable for the company to transport both to Europe and to the Pacific Ocean. But we have not yet officially issued this proposal, it is still being developed so it is still early to speak of it,” he said.

The Transneft chief also said that he hopes that the Eastern Siberia-Pacific Ocean pipeline section from the Talakan field in Yakutia and adjacent fields would start to work in reverse to Taishet at the start of next year, but the tariff for this section has not yet been calculated.

Vainshtok also said that Transneft is not yet preparing to implement the second phase of construction of the Eastern Siberia- Pacific Ocean pipeline, as this decision will only be taken after “Eastern Siberia is able to develop oil production to the level necessary to fill the second phase – 80 million tonnes per year.”

Earlier Transneft planned that the tariff to transport oil through the Eastern Siberia-Pacific Ocean pipeline, given that at the first stage oil would only be transported by pipeline to Skovorodino, and from there by rail, would amount to $49.9 per tonne, which would give oil companies the choice of transporting to the West or to the East.

However, Transneft was unable to reach agreement with Russian Railways (RTS: RZHD) (RZD) on the tariff. According to Industry and Energy Ministry calculations made a year ago, at that moment the tariff was calculated at up to $100 per tonne.

The Eastern Siberia-Pacific Ocean project has two phases. In the initial phase, a 2,400 kilometer-long Taishet-Skovorodino stretch will be laid and an oil terminal with an annual handling capacity of 30 million tonnes will be built on the Pacific coast. In the second phase a stretch linking Skovorodino and the Pacific coast will be laid. If a branch is laid to China, it will have capacity to ship 30 million tonnes of oil annually. The Skovorodino-Pacific Ocean stretch will handle 50 million tonnes of oil each year.

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