New Russian Far East VLCC port coming on-line

May 07, 2009 02:00 AM

Tankers could begin loading at the new Russian Far Eastern crude oil port of Kozmino as early as December, reports say.
The Transneft facility has a designed capacity of 1 mm bpd, which is the equivalent of an average Suezmax cargo or half a load for a VLCC. A spokesman for state-owned oil pipeline operator Transneft told that Russian rail deliveries of up to 300,000 bpd would start this year.

A third of that initial throughput is already committed by contract to be shipped to China, under loan and oil supply contracts recently signed in Beijing by Transneft and Rosneft with the China Development Bank and China National Petroleum.
About 140,000 bpd has been set aside for spot or contract deals with the remainder earmarked for domestic consumption, said the spokesman. South Korean buyers have reportedly already shown interest.

Kozmino is being promoted as one of Russia's largest crude oil export outlets opening to Asia Pacific markets. The Transneft spokesman told that another 300,000 bpd of Russian crude oil has been committed for delivery to northern China through the new overland pipeline being built from Skorovodino to the Chinese border.
A four-year target has been set for Transneft to build the rest of the planned pipeline from Skorovodino to Kozmino -- called the East Siberian Pacific Ocean pipeline, after which some 1.6 mm bpd of new Russian crude is slated to flow for export eastwards. Some 600,000 bpd are already committed for delivery to China by the northern overland pipeline and from Kozmino port.

The port, near Nakhodka in the Russian Far East, is said to be an indicator of a geo-strategic shift of Russian energy flow eastwards to Asian markets rather then westwards to Europe, something the Chinese have apparently been working towards for years.
Spot trading of Russian oil from Kozmino is likely to give Asian buyers a price advantage, and put pressure on Middle Eastern suppliers.

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