Russia Tests Ust-Luga with First Urals Exports
03.15.2012 - NEWS

March 15, 2012 [Reuters] - Russia will ship long-expected test cargoes of Urals crude URL-NWE-E from the new Baltic Sea port of Ust-Luga in March-April, a spokesman for the state oil pipeline monopoly Transneft told Reuters on Thursday.


Moscow has repeatedly delayed the launch of Ust-Luga, which was designed to allow Russian oil exports to bypass Belarus, citing technical reasons.

The delays to the start-up of Ust-Luga loadings, coupled with fears over disruptions to Iranian supplies, have supported Russian Urals crude prices, resulting in the grade’s longest rally on record in January.

“During March and April we will carry out several test shipments, after which a final decision (on the port) will be taken,” spokesman Igor Dyomin said.

He also confirmed a report that oil company Surgutneftegaz tendered to sell a 100,000 tonne cargo of Urals for lifting next week from Ust-Luga.

It is the second sell tender issued by Surgutneftegaz for an Ust-Luga cargo. The previous one was issued and quickly rescinded in February, when work was not completed on the repair of damage to terminal infrastructure after landslides demolished two quays late last year.

Cargo loading was previously expected to start last November.

Construction work at the terminal was carried out by NTK and Rosneftebunker, companies controlled by Gennady Timchenko, a co-owner of Geneva-based trading house Gunvor.

The outlet is a destination point for the second phase of Baltic Pipeline System-2, also known as BTS-2, with annual capacity of around 600,000 barrels per year.

Russia will not increase crude exports outright, seen at around 5 million barrels per day in 2012, after the port is launched.

Initially Ust-Luga was seen handling up to 40 million tonnes (800,000 barrels per day) of crude oil this year. But the volumes are not defined yet, and the second-quarter loading schedule has not been agreed.

Industry insiders also said that Anglo-Russian joint venture TNK-BP may redirect monthly volumes of 400,000 tonnes of oil from its loss-making Ukraine Lisichansk refinery to Ust-Luga.

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