False start of the oil pipeline

The government has canceled the project to build a branch bypassing Belarus

The Russian government seems to be thinking about the feasibility of a rash decision to build an oil pipeline bypassing Belarus . As it became known yesterday, it sent for revision a draft of the relevant order, the preparation of which was carried out by the Ministry of Industry and Energy. It was assumed that the pipe capacity would be about 50 million tons per year with the possibility of expansion to 75 million tons, and the length would be about 1 thousand km. Transneft notes that the government order is necessary for the company to begin developing a feasibility study for the project. “While verbal agreements have been reached on the construction of this oil pipeline, the Ministry of Industry and Energy is currently preparing an official government order, after which we will begin work on this project,” the company says. The Ministry of Industry and Energy declined to comment. According to an Interfax source, the formal reason for returning the document was the fact that it did not take into account the construction of an additional oil pipeline at the Kirishi Oil Refinery of Surgutneftegas, which would allow increasing the plant’s refining capacity from 20 million to 24 million tons per year.

The government order must indicate the expected capacity of the oil pipeline, its direction, construction period and financing methods. In addition, the Federal Tariff Service (FTS) must consider the issue of tariffs for pumping through the new pipe, taking into account funds for the reconstruction of existing oil pipelines and payments on loans raised to finance its construction. The Ministry of Industry and Energy previously complained about the lack of project documentation and the disinterest of oil workers in this project. Nevertheless, in early February the project was prepared and sent to Rostekhnadzor and the FTS.

However, if in January the idea of ​​​​building an oil pipeline bypassing Belarus was officially associated with transit risks, now the Ministry of Industry and Energy insists that this project is not related to New Year’s events. According to officials, it is necessary primarily to relieve congestion in the main oil pipeline system. However, experts believe that it is somewhat untimely to build the pipeline just to form a backup system when another Transneft project - an oil pipeline from Eastern Siberia to the Pacific Ocean - turned out to be much more expensive than it had expected. The pipeline monopoly has already attracted more than 85 billion rubles last year. from Sberbank for the eastern oil pipeline, and in February issued Eurobonds for $1.3 billion. Next year the company plans to borrow about another $8 billion for this project. And as you know, Transneft’s loan obligations are included in tariffs. Last year the latter grew by 8.7%, and 3.6% of them were intended for loan payments. Tariff increases could be even higher this year. And if we also implement the project to build an oil pipeline bypassing Belarus, which, according to expert estimates, could cost $2-2.5 billion, then the tariff will generally become sky-high.

So a delay in adopting a government order could be very useful for Transneft.

Anna GORSHKOVA