Transneft to begin construction of oil pipeline around Ukraine

Nov 30, 2000 01:00 AM

Russian Prime Minister Mikhail Kasyanov has signed a resolution requiring Transneft to begin the construction of an oil pipeline around Ukraine on the Sukhodolnaya-Rodionovskaya route. The pipeline will link the Samara oil network with the export terminal in Novorossiisk. Oil will thus be pumped across Russia only.
A government official said two alternative pipelines are being considered, one with a carrying capacity of 18 mm tpy of oil and the other with a capacity of more than 30 mm tpy. It is up to Transneft to choose the option. Depending on pipeline capacity, the project will cost between $ 150 mm and $ 210 mm (180-252 mm euros). The official also said that the project cost will be recouped from export tariffs on oil. The Federal Energy Commission said that Ukraine now earns $ 2.39 in transit fees per ton of Russian oil moved across its territory on the stretch between Samara and Novorossiisk.
Transportation costs on the by-pass route are expected to be half as high. The tariff on oil pumping on the Sukhodolnaya-Rodionovskaya route will be initially set at $ 1.2 (1.44 euros) per ton. Once the project cost is recouped, the tariff will be lowered to $ 0.50 (0.60 euros) per ton.

Source: Vedomosti via NewsBase
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