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Russian petroleum won't flow through foreign ports

Russian Transportation Minister Igor Levitin stated in an interview with Latvian journalists in Riga that Russia will stop exporting its petroleum products through foreign ports.

The minister was taking part in a Russian-Latvian interstate commission. The Transportation Ministry press service said that the shipments of oil and petroleum products will be rerouted through port in Northwestern Russia, that is, Ust-Luga, Primorsk, Vysotsk, Kaliningrad and Murmansk and that the change will take place between 2008 and 2015.

Russia exported 84,044,000 tons of petroleum products through seaports in 2006. Of that amount, 26,141,000 tons (31%) went through ports in neighboring states. Most often, ports in the Baltic countries were used, with 21,233,000 tons flowing through Estonia alone. Russian petroleum products were also shipped though Ukraine and Georgia. According to the Ukrainian Transportation Ministry, 6,793,000 tons of Russian oil and petroleum products passed through the ports of Odessa and Feodosia last year. Foreign export of oil and petroleum products costs Russia about $200 million per year.

Industry analysts note that oil and petroleum product export through Russian ports is more economical for Russian producers because of the low cost of railroad shipping in the country. Since the pipeline to the Latvian port of Ventspils was closed in 2003 and the Druzhba (Friendship) pipeline was shut down for repairs at Butinge, Lithuania, all Russian petroleum products have arrived at ports by train.

Analysts say that Russian transport now lacks the capacity to handle the load. Russian Railways plans to invest 239 billion rubles ($9.5 billion) in the rail system in Northwestern Russia by 2015, but it will also raise transport fees. (kommersant.com)