Transneft Pressing Huge Pipeline Investments (29.10.2004)
Transneft is initiating new pipeline projects to allow strong growth of oil export. The Northern pipeline to Indiga has entered the feasibility study phase. The Russian government will also decide upon a pipeline of 80 mln ton annual capacity from Taishet to the Pacific Ocean in December 2004.
The Arctic Pioneer Prirazlomnoye Facing Tanker Shortage (23.09.2004)
The launching of the Prirazlomnoye offshore project is entering its final phase. Rosneft is advancing to build its own fleet to service Prirazlomnoye and the other Arctic fields. The shortage of large, reinforced ice class tankers is threatening to delay the Arctic Pioneer project considerably.
Rosneft to Transport Siberian Oil through the Northern Sea Route (20.08.2004)
Rosneft and the Krasnoyarsk Territory Administration have announced their final decision on transporting Vankor oil through the Northern Sea Route by constructing a 750 km long pipeline from Vankor to the port of Dikson. With the adjacent fields included, Vankor area's total reserves are estimated to be around 300 million tons. The annual crude production is estimated to be 12-15 mln tons.
New Export Terminal on the Gulf of Finland (29.06.2004)
LUKoil has launched a new terminal in the town of Vysotsk. LUKoil plans to ship 4,7 mln tons of crude and products in the first phase, and has announced the schedule for expansion. The expansion will be supported by the development of the railway line and dredging works which will allow Vysotsk to receive tankers up to 80 000 dwt in size.
Transneft Prefers Indiga to Murmansk (21.05.2004)
Transneft is backing Indiga as a location for a new crude export terminal. A pipeline from Surgut to Indiga could be built in 20 months and the route would be economically more favourable than building the pipeline to Murmansk. The decision is likely to be made in 2005 after the Russian government has formulated a strategy on the development of the national oil reserves.
Rosneft's New Export Route in Operation (17.4.2004)
Rosneft has started export transportation of crude oil from Archangelsk via Murmansk to European markets. The new transport system includes shuttle tankers, a supporting fleet and a floating storage facility FSO Belokamenka located near Murmansk. The capacity of the system is 2,5 mln tons. Rosneft has already announced plans to double the capacity in 2005.
Oil Terminals in North-Western Russia (January 2004)
The Russian oil industry is responding to the rising price of crude oil by expanding the export facilities especially in the North-western part of the country. The port of Primorsk by the Baltic Sea is growing to be Russia's largest oil terminal. Transneft is developing the Baltic Pipeline System to accommodate over 60 mln tons of crude. Oil companies are investing in the Arctic ports in Archangelsk, Varandey and Murmansk.
The press summaries are based on several sources, such as Russian Energy, Neftetrasport, Russian Petroleum Investor, Interfax Petroleum News, Moscow Times, Kommersant, web journals as well as homepages of oil and transportation companies etc.
Use of any knowledge, information or data contained in these articles shall be at the user's sole risk. Editors shall not be liable or responsible for the use of this knowledge.
Transneft Pressing Huge Pipeline Investments
29.10.2004
Transneft announced that the Russian oil export capacity will exceed 255 mln tons in 2005. Semyon Vainshtok, President of the Russian pipeline monopoly, said that even now the pipelines could accommodate more oil than the oil companies are currently putting out. The export potential is 240 mln tons this year with 13 mln tons surplus capacity.
Transneft is initiating new pipeline projects to allow strong growth of the oil export. The Northern pipeline to Indiga has entered the feasibility study phase. The Russian government will decide upon a pipeline of 80 mln ton annual capacity from Taishet to the Pacific Ocean in December this year. Transneft is also waiting for a decision regarding the expansion of the Baltic Sea Pipeline from the current 50 mln tons to 62 mln tons annually. The company has also agreed to support Rosneft's plans to build a pipeline from Vankor oil fields to Dikson.
Surgut-Indiga pipeline
The Indiga project is progressing as Transneft published its' plans regarding the project to build a pipeline from Surgut to the Barents Sea. Transneft is considering two possible routes: a 1788 km long route from Surgut to Indiga via Usa and a 1878 km route from Surgut to Indiga via Kharyaga. In Indiga Transneft is looking at two possible locations for the three new terminals.
Although Transneft says the final decision has not been made, it is thought that the route is likely to start near Surgut and pass through the North Urals and via a crossing near Usa. Transneft says that the work on the feasibility study has been started in October 2004 and will be completed in ten months.
The pipeline will carry a total of 50 mln tons of crude oil annually serving the fields in Timan-Pechora province (20 mln tons) and West Siberia (30 mln tons). It has been estimated that the three terminals could accommodate tankers of 100 000t - 200 000t in size.
The decision to choose Indiga for the terminal location has been criticized due to the environmental conditions in the area. Indiga is a freezing port, therefore the tankers calling there would need icebreaker assistance several months annually.
Head of the Nenets AO, Vladimir Butov, believes the terminal will have a major development effect on the region and welcomes Transneft's plans. The local officials in Khanty Mansiisk district have responded to Transneft's letter of intent requiring more details to evaluate the proposed plans.
Vankor-Dikson pipeline
In addition to its' own construction plans Transneft is supporting Rosneft's Vankor-Dikson pipeline project. Rosneft aims to start production at the Vankor field during 2008 and transport the oil to the port of Dikson, where an underground oil terminal will be built.
Since Transneft has its hands full with several ongoing pipeline projects, it is not able to join the work full-scale. Instead, Transneft has promised support and technical assistance to Rosneft during the project.
Rosneft's transportation via the new pipeline will grow up to 14 mln tons of crude oil per annum during the first four years. In Rosneft's long-term plans the transportation will expand up to 20-30 mln tons annually.
Pipeline construction costs on the rise
While the high oil price and the lack of export corridors are boosting investment projects, the project budgets are on the rise as well.
The world market prices for steel have been on the rise due to fast growing economy of China. The pipeline raw-material prices have climbed by 40-50% during the past 6 months. Another reason is that the arctic conditions bring additional challenges that increase the costs. The carrying capacity of the ground in the remote northern areas is not good enough; the terrain is often swampy and frosts during winter.
The third reason for the rising costs is, that all the three pipeline manufacturers' plants are fully employed. The simultaneous expansion of the northern and eastern pipeline export routes would, however, allow the development of the pipeline construction industry.
Vainshtok reappointed until 2007
Semyon Vainshtok, who has led Transneft since 1999, was reappointed for another three years as the head of the company in September 2004.
During Vainshtok's five-year leadership Transneft has expanded its export capacity by 50%, and has also initiated several strategic pipeline projects including the Baltic Sea pipeline to Primorsk. Besides developing the company's businesses, Vainshtok has managed to develop the company internally towards a more efficient working culture.
Vainshtok is challenged by his distant relationship with the Russian government. The state's support to Transneft's proposals has not been strong enough to allow him to develop the company to relieve the export capacity constraints. Vainshtok has had troubles with getting government backing for the constantly growing investment needs. Although the state as well as the domestic and international corporate world considers him to be very competent and loyal official, he lacks the personal support of President Putin and Prime Minister Fradkov.
Sources: Interfax Petroleum Report, NefteTransport, Russian Energy, Neft i Kapital, Moscow Times
The Arctic Pioneer Prirazlomnoye Facing Tanker Shortage
23.09.2004
The Prirazlomnoye oil field, which is located in the Pechora Sea shelf, was discovered in 1989. It is located 60 km north of the coast of Varandey region at water depth of 20-30 meters. Prirazlomnoye field reserves are estimated to hold 231 million tons of oil of which 83,2 have been confirmed recoverable.
The environmental conditions are harsh: the winds are freezing and the mean temperature is as low as -4C. Temperatures below -45C have been measured in the area. The level ice thickness in the area is 1-1,2 meters (sometimes even 1,6m) with ridges up to 15-20 meters.
Development of the Project
The licence to the field is held by Sevmorneftegaz, which is a joint venture of Gazprom and Rosneft.
The project has been abandoned by two foreign investors, first the BHP petroleum in 1994 and then the Wintershall AG, subsidiary of the German giant BASF Group in 2001. Among other reasons both of these considered the economical and technical risks too high. After Wintershall's withdrawal, Gazprom signed an agreement with Rosneft to develop the field. Sevmorneftegaz was founded in 2002 and has now committed to $550 million in investments.
The launching of the project is now entering its final phase. The PSA (Production Sharing Agreement) is going through the final rounds of approvals in the relevant ministries and agencies, and they are expected to sign the papers during this fall.
Technical Development
The complete offshore platform was originally to be built at Russia's Sevmash enterprise in Severodvinsk near Archangelsk. The plans have changed and now only the construction of the caisson-type foundation the platform will be completed.
Sevmorneftegaz bought the platform from Kerr-McKee North Sea. It had been used in the North Sea for 18 years. The upper part of the platform, originally built by Hutton TLP, was located to the Severodvinsk for reconstruction and modernisation. From there it will be floated to Prirazlomnoye.
The schedule of the project is very tight. The reconstruction of the Hutton platform is due to be completed during spring 2005. The platform will be towed to the field during fall 2005. First oil would be recovered during the last quarter of the year 2005. The well flow from will range from 1600 to 2300 cubic meters of oil per day. On the fifth year of the project the production will reach its maximum level of 7,55 million tons of oil per year.
The officials involved in the project are unwilling to disclose any details of the ongoing project. This has confused the media, and an unofficial information source hinted that the project is not moving ahead as quickly as planned and that the schedule has been delayed by more than a year. Legal, economic and other problems have emerged during the PSA negotiations. In addition to this independent environmentalists did not accept the environmental impact assessment report. The high oil price has, however, stimulated the project during fall 2004.
The Arctic Fleet
According to the plans, the Prirazlomnoye oil will be transported throughout the year. The storage facilities include two unloading stations. The oil will be loaded to shuttle tankers and taken to the storage tanker Belokamenka near Murmansk. Supertankers will transport the oil from there to Rotterdam.
The oil quality of Prirazlomnoye is somewhat inferior to the Ural crude oil grade, due to heaviness and sulphur content. The sulphur content is actually so high, that only Rotterdam will accept the oil. The end-users of the oil products are in the Netherlands and in Britain.
Rosneft is advancing to build it's own fleet to service the Arctic fields. The transportation scheme of the Prirazlomnoye field includes platform services, logistics services, cargo deliveries and oil transportation.
The plan is to be implemented by using special service vessels and two shuttle tankers of 70 000 dwt. The bidding for the construction of these tankers is underway. They must be arctic tankers with ice class of Ice-10 or Ice-15 (DNV Norway). The tankers are to be in operation in 2006.
Sevmorneftegaz has decided to acquire two Norwegian-made multifunctional icebreakers, of which the first one is to start operation in September 2005. The vessels are capable to carry out piloting, cargo transporting, fire and environmental safety related tasks. Two to three Larna-type vessels are acquired to ensure environmental safety and a fueler vessel to service the fleet.
Sovcomflot has estimated, that building the fleet would cost Rosneft something between $230 and $300 million (not including the technical support vessels). Even with the maintenance costs of $6000-$7000 per day and the fuel costs, the analysts say that building the fleet is a profitable investment for Rosneft. Far-eastern Marine Company FEMCO will operate the fleet. FEMCO says, that the construction and maintenance of these vessels will only be economic if they operate at 100% capacity.
The shortage of large, reinforced ice class tankers could delay the whole project considerably. The orders for the tankers, however, have not yet been placed early enough to make sure they are completed in time. The foreign shipyards, that are able to construct demanding arctic vessels, are full and the Russian shipyards lack sufficient experience. FEMCO suggests, that the construction of the tankers could be financed by a shipping company that would gain a long-term shipping contract from the field. The negotiations are ongoing.
Rosneft to Transport Siberian Oil through the Northern Sea Route
20.08.2004
Rosneft and the Krasnoyarsk Territory Administration announced late in June their final decision on the route to move out oil from the Vankorskoye field in the Taimyr Autonomous Area in Eastern Siberia. The most favorable option is to start transporting Vankor oil through the Northern Sea Route by constructing a 750 km long oil pipeline from Vankor to Dickson on the Taimyr Peninsula by the Kara Sea. Rosneft plans Vankor to reach "considerable" output by 2007, when approximately 2.5 million tons of raw materials will be extracted.
Alternate transport routes included constructing a 500 km pipeline to Transneft's trunk pipeline and constructing a pipeline from Vankor to Ust-Port near Dudinka. Transneft's pipeline was deemed inadequate, since only 45% of Vankor's oil production could be transported. Also the profitability would be affected, since the high quality Vankor light crude oil would have been blended with cheaper heavy crude oil. Ust-Port was not chosen, because for several months in a year, the Yenisey estuary is blocked with very thick ice-hummocks. Thus the decision was made to utilize the 100% oil export capability of the Dickson Port.
Alexander Khloponin, Krasnoyarsk Territory governor and a major shareholder in Norilsk Nickel, also favored the northern route to Dickson Port. According to him, Norilsk Nickel has been the sole bearer of the maintenance expenses of the Northern Sea Route. Moving oil through this route will lower ice fees in the region, which will also make transporting lumber more profitable.
The 700 mm diameter-pipeline will be built in two stages. In the first stage, the pipeline will reach the Yenisey-river in the Dudinka area, from where oil will be carried by river tankers of 30,000-40,000 tons displacement. This will permit the export of 3-3.5 million tons of oil per year. When oil production reaches 9-10 million tons in the area, second-stage construction will be required to extend the pipeline to Dickson, from where oil will be transported by ship. Specialists estimate oil production at Vankor to amount to 15 million tons per year.
According to a feasibility study, the capacity of the pipeline will be 30 million tons of oil per year and cost a maximum of $2 billion. This estimate includes the construction costs of six to seven 100,000-ton ice-class tankers. The total volume of cash to be injected in the plan is $3 billion. Rosneft is trying to persuade foreign investment in order to finance the project. If negotiations with France's Total prove successful, Rosneft will expect Total to join the Vankor project after the exploration work has been completed.
The base fields from where the pipeline will originate include the fields Vankor and North-Vankor. The recoverable reserves of the two fields total 163.2 million tons of oil and 76.8 billion cubic meters of gas. With the adjacent fields included, Vankor area's total reserves are estimated to be around 300 million tons. Rosneft acquired rights for 11 of the adjacent oil fields in 2003. Resolution of the route issue should increase the efforts to develop these fields and kick-start the pipeline project. Oil fields in the Vankor area will also benefit from lowered shipment costs and attract foreign investment. Construction of the oil pipeline will enable Russia to bump up fuel exports significantly and will help to develop the Russian North.
New Export Terminal on the Gulf of Finland
29.06.2004
On June 16, 2004, the Russian oil company LUKOIL officially opened a new terminal in the town of Vysotsk. Vysotsk is located in the Leningrad region, 150km northwest from St Petersburg. Russian Prime Minister Mikhail Fradkov attended the opening ceremony that launched the first phase of the terminal.
Construction of the first phase of the terminal began in June 2002 and cost around $200 million to build. The contractors of the terminal were LUKOIL-Neftegazstroi and Fluor Corporation (USA). The project was financed by a 12-year loan from the United States to RPK-Vysotsk LUKOIL II, which is a newly formed subsidiary of LUKOIL. RPK-Vysotsk LUKOIL II is the operator of Vysotsk terminal, although Transneft has proposed to put the terminal under state management and be run by Transnefteprodukt.
The initial capacity of the terminal is 4.7 million tons per year. The total capacity is split evenly between oil products and crude oil, although at first Vysotsk was planned to only load oil products. Petroleum products will mainly be shipped to the US for sale through the Getty Petroleum network, which is also owned by LUKOIL.
The terminal's facilities include eight 20,000m3 storage tanks and 4 berths. Berth 2 at the terminal is fully operational and is able to accommodate 20,000t vessels. The dredging in progress will enable the terminal to accommodate 50,000-ton tankers by the end of this year. Berth 4 is used for support ships and Berth 3 for river-sea tankers.
The rail line is the main constraint of Vysotsk because it can only hold 62-car trains and the train route passes through the town of Vyborg. In June the terminal was able to handle three trains a day, which is equivalent to 2.5 million tons per year. After the spur bypassing Vyborg is completed and the state-owned Russian Railways has upgraded the railway line to handle 72 cars, the loading capacity will rise to 4.7 million tons per year.
The second phase of the terminal is scheduled to be complete in late 2004. This will boost Vysotsk capacity to about 11 million tons per year. In addition to the upgraded railway line, the second construction phase includes additional storage space of nine 20,000m3 tanks and the completion of Berth 1. Berth 1 will be able to accommodate 80,000t tankers, and together with Berth 2, will be able to serve 160 tankers a year.
LUKOIL's Vice President Anatoly Barkov said that the capacity of Vysotsk oil terminal could be 16 million - 17 million tons of petroleum cargo per year when the third construction phase is completed. LUKOIL is not planning to increase the terminal's capacity to this volume yet.
According to LUKOIL, all tankers entering the terminal area must be double-hulled. The tankers must also be equipped with isolated systems for ballast water and cargo and modern navigation systems with electronic maps. Support fleet services will be provided by the St Petersburg-based Portovy Flot and ice-breaking assistance by St Petersburg port.
Transneft Prefers Indiga to Murmansk
21.05.2004
The rapid growth of oil production in Russia is soon to be limited by the dearth of capacity to accommodate the oil. During spring 2004 the discussion on possible solutions to problem has introduced several options. Each of them has their own supporters within the industry.
The Murmansk export project, initiated by Russia's four leading oil companies hasn't been moving ahead as expected. During the spring 2004 it has become obvious that Russia's leading pipeline company Transneft strongly objects the Murmansk pipeline.
Previously, this solution was promoted as a solution that provided a new pipeline connection to an ice-free seaport as well as alleviated the capacity problems in the trunk lines Yaroslavl onwards. It would also alleviate the pressure on the Danish straits. And more importantly: the pipeline would enable the big oil companies to boost their export westwards significantly.
The opposition, lead by Transneft, has criticized Murmansk seaport as an irrational and expensive solution. Transneft has introduced several export projects to be assessed alongside the Murmansk line.
The Baltic Pipeline System is to obtain serious competition if the Murmansk line was to go ahead. The narrow and difficult Danish straits restrict the shipments from Primorsk. The eastern end of the Gulf of Finland suffers from severe freezing and ice ramparts especially in January and February. The Murmansk port, on the other hand, is ice-free and can harbour tankers even up to 300 000 dwt, which is almost triple the size of the tankers allowed in Primorsk. The export from Primorsk is also restricted by the lack of ice-class tankers. The development of the BPS is ongoing and Transneft hopes to increase the capacity of export from Primorsk to 62 million tonnes per year in 2005.
Solutions that would utilize the Northern Sea Route include the development of the Indiga terminal.
Transneft has represented Indiga as a quick and economical solution: pipeline from Surgut to Indiga could be completed in 20 months and it would cost only a friction of the costs the Murmansk line would cause - mainly because sea crossing would be avoided. But in order to reach the volumes planned for Murmansk (80-120 million tonnes per year) in Indiga terminal, several additional investments including increase of capacity of the pipelines to Surgut would be needed. These investments do not fit in the current budget or the timetable of Indiga pipeline project.
Indiga is a freezing port, so tankers coming and leaving would need ice-breaking assistance for several months every year. Indiga could, however, harbour big tankers (200 000 DWT), which would lower the transport costs.
The question of Murmansk/Indiga/Primorsk is also affected by the Pacific pipeline project, which again depends on investments to explore for new reserves in the Eastern Siberia. At the moment the proven reserves are not big enough to secure profitable pipeline investments. Compared to Indiga, the Pacific pipeline as well as the Murmansk pipeline seems slow and costly solutions in the eyes of the Russian Government.
Rosneft's New Export Route in Operation
17.4.2004
In mid January the inauguration of Rosneft's new oil terminal in Arkhangelsk on the White Sea took place. The oil cargo is carried by shuttle tankers from the new terminal to a storage tanker anchored in the ice-free Kola Bay near Murmansk, from which it is loaded into large tankers for export.
The terminal's first stage annual capacity is 2,5 million tons of oil per year. A second stage, planned to be finished in 2005, raises the capacity to 5 million tons. The plan is to ship 2,1 million tons this year, and the future plan is to export some 20 million tons of oil and condensate through the new terminal. The cost of the first stage of the terminal is reported to have been over $13 million with an estimate of a similar amount for the second stage.
The 360.000 dwt storage tanker, renamed Belokamenka (former Bergesen Pioneer), is leased for 20 years with a buy-out clause. Three shuttle tankers of the 17.700 dwt Samotlor-class are now operating on the Arkhangelsk - Kola Bay route. Simultaneous loading of two 25.000 dwt tankers is today possible. The produced oil is reloaded onto railroad from Transneft's oil trunk pipeline in Privodino, from where it is transported to Arkchangelsk.
Initially, hydrocarbons produced in the Timan-Pechora by Rosneft's Severnaya Neft and the joint venture Polar Lights (with ConocoPhillips) is shipped for export using this new route. The storage tanker in Kola Bay will also be used for the transshipment of the production from the Prirazlomnoye field on the Pechora Sea. Crude will be ferried by ice-resistant shuttle tankers to Kola Bay. Production at Prirazlomnoje will peak at some 7 million tons of oil per year in 2012. The production is estimated to begin in 2005.
Also supplies from Rosneft's fields in the Vankor block in the Krasnoyarsk Territory in Eastern Siberia are planned to be integrated in this scheme of using the storage tanker in Murmansk. Among several options there is a plan to build an 800 km oil pipeline from Vankorskoye to a new oil terminal in Dickson with an annual capacity of about 12 million tons. Rosneft plans to recover the first Vankor oil in 2007.
Oil Terminals in North-Western Russia
Press summary January 2004
Gulf of Finland
Primorsk
Second expansion phase of Baltic Pipeline System (BPS) will be ready in March 2004, well ahead of schedule. The capacity will then be 42 million tons a year (840,000 b/d).
In July the capacity of BPS was boosted from the level of 12 million tons to 18 million tons and in November to 30 million tons a year (640,000 b/d), two months ahead of schedule. According to Transneft, the cost of the second phase is about 1.2 billion USD, not including port infrastructure.
The third stage is planned for next year. This will take the capacity to 62 million tons a year (1.25 million b/d). The government of the Leningrad region has approved a plan to develop the Primorsk Port that calls for increasing cargo turnover to 135 million tons of hydrocarbons per year.
The Primorsk port loaded 12 million tons in 2002 and 16,7 million tons in 2003.
Tankers of at least ice class 1C have been required at Primorsk since December 15. The shortage of ice class tankers can be seen in tanker rates: Primorsk - Rotterdam rate was 3 USD/bbl on January 6, which is three times the early December rate.
Vysotsk
Launch of LUKoil's Vysotsk terminal is delayed until the second quarter of 2004. Capacity will then be 4.35 million t/year.
The terminal will have a double-sided rail track for 72 railcars and six 20,000 cubic meter storage tanks. There will also be two moorings for 47,000 dwt sea going tankers and 6,000 dwt river tankers.
The second phase in 2005 will bring the capacity to 10.75 million tons per year. The second phase should also allow tankers up to 70,000 dwt.
First phase cost is 140 million USD. Total project cost 300 million USD. Financing is arranged by OPIC (Overseas Private Investment Corp.).
Arctic Seas
Murmansk terminal
Russian oil companies are boosting crude and gas condensate exports through floating storage facilities on the Kola bay near Murmansk. Two floating storage tankers have started operations on the ice-free bay.
Vitino oil terminal operator White Sea Complex is operating a floating storage tanker owned by the Murmansk Shipping Company. Crude from Vitino is shipped through this storage tanker.
State owned oil company Rosneft operates the second 360,000 t tanker handling crude and gas condensate deliveries from the Arkhangelsk terminal. The tanker is located at Belokamenka on the Kola Bay. Far Eastern Marine Company (FEMCO) has leased the tanker from Norway. FEMCO is a shipping affiliate of Rosneft
Murmansk pipeline system MPS
The Murmansk pipeline project was initiated by Russia's largest private oil companies. So far the government's attitude to the proposal to construct a new trunk oil pipeline has been negative.
Transneft is preparing a feasibility study on the Western Siberia - Murmansk oil pipeline that should be ready by fall 2004. The planned capacity is 120 million tons per year. Total cost of the pipeline system is estimated to be 3.4 or 4.5 billion USD depending on the route.
Arkhangelsk
State owned oil company Rosneft has its own terminal in Kotlas near Arkhangelsk on the White Sea. The terminal has reloaded 2.2 million tons of oil products a year. Now the first upgrade of the terminal is ready and opened for crude exports. The volume is expected to be increased to 4 million tons per year soon and later further to 6.5 million tons.
Plan is to ship seven to eight 20,000 tons cargoes per month that will go to the floating storage tanker near Murmansk. Draught at terminal will be increased to allow 70,000 t tankers.
The development of the terminal is expected to cost 15 million USD.
Rosneft has signed a co-operation agreement with the Russian Ministry of Transport for development of safe transportation systems for hydrocarbons from the northern areas. The parties have made a plan to provide icebreaker support for Rosneft's cargoes from Arkhangelsk during the winter season 2003-2004. Long-term plans will also be worked out.
Severodvinsk
Regional Oil Company Tatneft plans to build an oil products terminal near Arkhangelsk in Severodvinsk. Until now, Tatneft has loaded products through Rosneft's terminal, but it is converted to handle crude oil and gas condensate. Construction of the terminal will begin in 2005. The capacity will be 2.5 million tons a year.
Vitino
The Vitino oil terminal on the White Sea loads crude for Yukos, LUKoil and Tatneft. Vitino can handle about 700,000 tons per month in summer and 500,000 tons per month in winter. Crude is delivered to the port by rail and shipped in small tankers to the floating storage tanker owned by Murmansk Shipping Company. In 2003 Vitino loaded 3.2 million tons of crude oil.
Onega
Volgotanker carries oil products through the Baltic - White Sea Canal from Ufa via Yaroslavl to Onega on the White Sea. Approximately 75,000 tons per month is shipped on 2,640 dwt tankers. There is a plan to increase the capacity to 130,000 - 140,000 tons per month.
Varandei
The Varandei terminal on the Pechora Sea serves the Timano-Pechora oil and gas province. Current capacity is 1.5 million tons per year. LUKoil has plans to expand it to 20 - 25 million tons per year. Crude oil will be shipped in shuttle tankers to Murmansk for further transhipment to large tankers.