No. 3, 2007

Alexey Bambulyak,
Manager for Russia of Akvaplan-niva AS


Russia builds up export oil terminals on the eve of Arctic offshore field development

In recent years more and more attention has been devoted to the prospective use of the hydrocarbon resources of the Russian Arctic shelf as well as the development of the oil and gas industry and the transport infrastructure of the Arctic. For a long time the projected rise in the oil and natural gas flow in the North-European direction has been associated with the future hydrocarbon production in the Barents and Pechora seas, and plans to construct an oil trunkline from Western Siberia to the Arctic coast.

From Tiksi to Indiga

According to experts estimates, by the year 2015, Russia will have capacities to annually export about 150 million tons of oil via its northern terminals. This will enable the Russian companies to diversify their export routes.

Within the next ten years it is planned to deliver by rail about 50 million tons of liquid hydrocarbons to the terminals in the Kola Bay of the Barents Sea and the White Sea ports of Vitino and Arkhangelsk. A further 20 million tons may be delivered from the northern fields in the Timan-Pechora province in the Nenets Autonomous Area and in the Pechora Sea. The export capacity of the terminals in the Kara Sea is 2 to 3 million tons of oil, with reloading at the transshipment complexes in the Barents Sea.

That direction was opened up in 1999 by RITEK which exported Western Siberian oil via its terminals in the Gulf of Ob. Formerly, crude oil was supplied by local pipelines to the river Ob terminals and then shipped by river tankers (having a deadweight of 2,000 tons) to the Gulf of Ob where from it was transferred to 20,000-ton tankers which carried it to the Belokamenka storage tanker waiting in the Kola Bay. But in 2006, RITEK optimized the oil transporting arrangement and began its transshipment via the 40,000-ton Severomorsk storage tanker in the Gulf of Ob, which made it possible to unload 460,000 tons of oil for export. In the future, RITEK plans to build an oil pipeline and a terminal in the Gulf of Ob with a handling capacity of 3 million tons a year.

Back in 2000, LUKOIL and the Murmansk shipping company put into service an oil loading terminal in Varandeya in the Pechora Sea. It was one of the most promising projects of transporting Timan-Pechora oil by sea. In 2006, LUKOIL's 1.5 million tons per year terminal operated round the year to handle 500,000 tons of crude oil which first was delivered to Belokamenka storage tanker in the Kola Bay and then sent on for export.

In 2005, LUKOIL started constructing a new 12 million tons per year oil-transshipment complex in Varandeya to export crude oil produced jointly by the Company and ConocoPhillips under the Northern Territories project. In the future, the capacity of the Varandey terminal may be brought up to 25 million tons per year.

The Sovkomflot and Gazflot companies are jointly developing an integrated plan for oil transport from the Prirazlomnoye field, one of the largest on the Pechora Sea shelf. The year round, crude oil from the Prirazlomnoye platform will be loaded into ice-class shuttle tankers (deadweight up to 70,000 tons that will deliver it to a Barents Sea terminal wherefrom it will be reloaded into line tankers for export.

In time, this route may be used to deliver oil from the Dolginskoye field located north of Prirazlomnoye. The right to use it also belongs to Gazprom.

In recent years, up to 100,000 tons of oil have been produced annually at the Peschanoozerskoye oil and gas condensate field on Kolguyev Island (Nenets Autonomous Area). Practically all of that oil is transferred via a siphon during the summer shipping season from the Kolguyev Island tank farm into 20,000-ton tankers and carried abroad. However, the prospects for the development of the Kolguyev terminal are limited - primarily because of the amount of oil being produced on the island.

Transneft plans to lay a Northern pipeline from Kharyaga to Indiga and a terminal in Indiga. However, no concrete date of their commissioning has been established yet.

The White Sea gateway

The Talagi terminal, situated near Arkhangelsk on the bank of the Northern Dvina, has been used by the Rosneft-Arkhangelsknefteprodukt company since 2002 to export crude oil produced in the Timan-Pechora province by the Severnaya Neft company, an affiliate of Rosneft. In 2005, Rosneft-Arkhangelsknefteprodukt shipped for export 4.2 million tons of oil and petroleum products from the Talagi terminal, and in 2006 - 3.1 million tons. Last year, Rosneft started phase two of Talagi export terminal upgrading, which is to be completed in 2007, to raise its throughput capacity to 6 million tons of oil and petroleum products, including 4.5 million tons of crude oil. Later on, it is planned to gradually increase its capacity up to 10 million tons per year.

In 2003, Rosneft launched the construction of a 4.5 million tons terminal in Privodino to serve as an interlink in the shipping route. The terminal was put into service in 2006.

Vitino, in the Kandalaksha Bay of the White Sea, is the first privately owned sea port in the history of latter-day Russia which started shipping crude oil and petroleum products for export back in 1995. Oil and petroleum products are brought to the White Sea tank farm by rail, and in Vitino they are reloaded into tankers (deadweight up to 80,000 tons), which carry them abroad either directly or with a reloading in the Barents Sea.

In 2003, 5.7 million tons of oil were exported via the Vitino terminal, but in 2004, the figure dropped to 3.7 million tons (because transport flows had been diverted to Murmansk), and in 2005, to a mere 1.6 million tons (including 800,000 tons of gas condensate). However, the year 2006 registered an increase, and the amount shipped then was back to 3.7 million tons.

In 2004, a large-scale upgrading effort was started at the terminal. Main attention was focused on optimizing the transport routes and increasing petroleum products shipment capacity. In 2005, the throughput capacity of the Vitino terminal was raised to 11 million tons a year.

The key role of Murmansk

From 2004 on, two terminals in Murmansk began reloading export oil from railroad tank cars to sea-going tankers. One of the terminals was constructed at dockyard No. 35 jointly with the Tangra Oil company; the other - at the dockyard of the Murmansk fishing port. In 2006, Tangra Oil began carrying out operations with petroleum products only, and in the space of one year it exported 1.7 million tons of fuel oil via the latter terminal.

A third terminal, on the east coast of the Kola Bay (in the Mokhnatkina Pakhta cove, Severomorsk District), was put into service in 2006. It was built jointly by two companies - Kommandit Servis and Sudkomgrupp - which used the facilities of the bulk plant of the Northern Sea Fleet. This terminal employs the usual transshipment arrangement: petroleum products are delivered by rail to the Mokhnatkina Pakhta station, reloaded into a tank farm, and then pumped over a pipeline into the Marshal Vasilevsky storage tanker (deadweight 68,000 tons), wherefrom they are transferred to sea-going tankers. The terminal has a capacity of 2.5 million tons. The companies Prozhetra and Sudkomgrupp plan to increase its throughput capacity to 5 million tons. Also, these companies consider building one more terminal in Safonovo near Severomorsk - with an annual capacity of 15 million tons of oil.

The first offshore oil transshipment terminal (OTT) was constructed in the Kola Bay by the Murmansk Shipping Company near Cape Mishukovo and exported its first consignment of oil in 2002. Until 2004, oil and petroleum products had been reloaded from shuttle tankers to sea-going tankers (deadweight c. 100,000 tons), standing side by side. In 2004, these operations began to be carried out via the Treider storage tanker. In 2005, the tanker cast anchor at jetty No. 35 of the dockyard mentioned earlier, and OTT-1 went idle. The design capacity of the terminal is 5.4 million tons per year.

The second offshore oil shipment terminal (OTT-2) in the Kola Bay was put into operation by the White Sea Service company in 2003, but it worked for only a few months reloading oil delivered from the Vitino terminal.

The third and largest harbor terminal (OTT-3), named Belokamenka, began functioning in 2004. It is in fact a joint venture of Rosneft and the Norwegian company Bergesen. The basic element of the terminal is the Belokamenka storage tanker with a deadweight of 360,000 tons. The tanker receives crude oil delivered by shuttle tankers from the terminals in the Gulf of Ob, Varandey and Talagi and reloads it into sea-going tankers with a deadweight of up to 150,000 tons. At present, this complex has an annual capacity of 5 million tons, but in time it may be brought up to 20 million tons. In 2006, the Belokamenka dispatched 4 million tons of crude oil for export.

And so, there is a clear tendency to develop the northern direction in the Russian export of oil, with particular attention given to building up the capacity of the existing terminals through the optimization of logistic schemes. Solving this task has been facilitated by the coming to the North of a major shipowner - the Sovkomflot group which has concluded agreements on servicing offshore field development projects of such leading Russian companies as LUKOIL, Gazprom and Rosneft.

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Oil of Russia, No. 3, 2007
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